General Motors"After major restructuring changes in last...


General Motors

"After major restructuring changes in last year's third quarter, General Motors (GM, NYSE, around $38) announced a larger-than-expected fourth quarter loss of $2.89 a share. We would note that stocks tend to reach their lows once all the bad news is widely known," says John Dessauer, Dessauer's Journal, Orleans, Mass.

"In the case of General Motors, we believe that point has eithealready been reached or is not far away. There could be some pleasant surprises ahead. The stock, trading at three times cash flow, is rated a buy."


"Despite the negative news surrounding the auto industry, we believe that now is definitely not the time to sell. We advise both shortsighted and farsighted investors to actually buy Chrysler (C, NYSE, around $14), says John Buckingham, The Prudential Speculator, Santa Monica, Calif.

Our short-term optimism is based on the fact that declining interest rates are very positive for the auto companies. Three to five years from now, we estimate that earnings per share at Chrysler could reach $4. Buy Chrysler up to 12 1/2 .

Genuine Parts

"Consistent, predictable growth is the hallmark of a well managed company. Such is the case with Genuine Parts (GPC, NYSE, around $40), says John Stugres of Shearson Lehman Brothers.

The company does particularly well when consumers postpone buying new cars and maintain their older vehicles. Genuine's customer base is large and growing. I look for the stock to rise to the $50 to $55 level within the next 12 months. Add in the dividend of 3.6 percent and the issue's return potential is very attractive."

Champion Parts

"Champion Parts (CREB, OTC, $4) is the largest independent maker of remanufactured auto replacement parts such as carburetors, alternators and clutches. The auto after-market is suffering from severe competition and overcapacity. Nevertheless, there is reason to buy this stock, says Nielsen's International Investment Letter, Olympia, Wash.

DThe recession will likely force people to replace auto parts, rather than buying new cars. At the same time book value is almost twice the stock price."

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