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GM, Ford Hit Their Gas Pedals: Buying Opportunities

Summary

GM is poised to do well even though Ford also has a strong upside.

Shares of GM look cheap right now and may be a good buy.

Even if a surge doesn't reach the expected levels, investors still can make strong returns when their earnings are combined with GM dividends.

GM has addressed threats from ride-sharing companies and a competitive EV market head-on.

Potential 25 percent upside in 2016 for GM

On April 16, Barron's reported that shares of General Motors (NYSE: GM) are poised for a substantial increase in 2016. The upside for the company is 25 percent. A key factor driving GM's upside is continued strong expected automobile sales. In the U.S., cars currently average 11-years-old and trucks average 13-years-old. This means a large number of vehicles will need to be replaced each year due to their ages.

In the first quarter, sales of new vehicles for GM were on pace to reach 17 million per year. Some investors are concerned about the sluggish economy in China and what they consider to be a potential slowing of the auto industry. Even if a slowdown happens, Barron's states sales should still plateau somewhere...


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