GENERAL MOTORS CO. $27 - New York symbol GM

GENERAL MOTORS CO. $27 (New York symbol GM; Shares outstanding: 1.6 billion; Market cap: $43.2 billion; www.gm.com) completed its initial public offering in November 2011, selling 555 million shares at $33.00 each. The U.S. government still owns 32.3% of General Motors in the wake of the company’s bankruptcy and restructuring.

GM’s profits are rising again: in 2011, it earned $7.6 billion, or $4.58 a share, up 61.7% from $4.7 billion, or $2.89 a share, in 2010. Sales rose 10.8%, to $150.3 billion from $135.6 billion.

However, the company’s European operations continue to lose money: a total of $15.6 billion since 1999. As well, rigid union contracts will make it difficult for GM to restructure this business. That could delay the company’s plan to resume paying dividends.

We don’t recommend General Motors.

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