Tomahawk, WI 01/16/2014 (BasicsMedia) – Many investors remember General Motors Company (NYSE:GM) with a sour taste in the mouth due to the painful story of the company’s 2009 bankruptcy. Given what happened to investors when the company failed is still fresh in memory, naturally there is hesitation as to whether you should buy into General Motors’s unfolding turnaround.

By most measures, General Motors has got a lot of its problems behind it and it is looking to the future with optimism. However, there is no better way to justify this assertion than to review the company’s prospects in details.

First, it is clear that the auto industry is recovering very fast and this recovery can be seen in the performance of leading carmakers for the trading period of 2013. As for General Motors Company (NYSE:GM), dislodging from the government’s bailout loan is an important milestone towards a solid future. But at the same time, the fact remains that the automaker still has a long road to travel in its turnaround story. We should be asking if the company has what it takes to travel this road and what impact investors will feel when things eventually get back in shape.

But before we do that, it is important noting that at the moment, GM comes across as the cheapest major automaker by its Price-earnings ratio of 7.3.

How the company is stage-managing turnaround

It is agreed that for any automaker to have life in business, it must produce vehicles which people want. As such, General Motors is doing everything possible to make its vehicle portfolio the best in industry. As to whether it will succeed in being the best among peers is not very important, what is important is that the company’s existing market and expected vehicle upgrade and new launches should result in better revenue and thus profits.

The company has announced that it hopes to have refreshed redesigned or replaced 90 percent of its current vehicle line-up by 2016. This will be in addition to new vehicle launches where the company is targeting to launch about 15 new vehicles by the end of this year.

Launching new vehicles seems to be the concern of automakers looking to expand their presence in key emerging markets. Ford Motor Company (NYSE:F) is one such company that is expected to launch the biggest number of vehicles by the end of 2014. The company has already prepared investors that during the new vehicle launches, its margin and thus profits will be under pressure, however, afterwards, it hopes to start drawing benefits from the project.

Among the few reasons why investors should consider General Motors Company (NYSE:GM) positively this time around is that its incoming CEO Mary Barra is one of the key figures at the company that have been behind the company’s global success. Now that she will be at the helm suggests that there will be even more success for the company in international markets.

Impact to investors

Investors can expect General Motors Company (NYSE:GM) to start retuning value on investment. As mentioned earlier, now that the company is free from government influence makes it easy to raise dividend payout just as the company did this week by bringing it $0.30 per share on quarterly basis.

You can also expect the company to embark on aggressive stock repurchase.

Bottom line

They say that once beaten twice shy, and this could be the reason some investors may feel hesitant to invest in General Motors Company (NYSE:GM) even as the company shows strong turnaround prospects. But remember there may not be another opportunity to get this stock cheaply as it is now.

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