Barron's: GM stock looks dirt cheap

|By:, SA News Editor

GM is seeing strong results on the sales floor, and with a rock-bottom valuation and 3.3% yield, shares could rise 30%, according to a Barron's profile.

Investors who look beyond the recall headlines will find much to like in GM, Jack Hough writes: U.S. light vehicle sales are the strongest since summer 2006, Europe's besieged car market has begun to recover with nine straight months of growth, and overall market share rose to 18.9% in June from 17.8% in May thanks to strong sales of SUVs and crossovers.

GM will struggle to top $3 in EPS this year after recall costs and other expenses, but next year it could earn $5, with two-thirds of the increase coming from simply moving past one-time costs, Sterne Agee says; if that's right, GM now trades at 7.5x next year's earnings, an 18% discount to Ford (NYSE:F) and a 50% discount to the market.