It has just been a little over five years since this company—the largest manufacturer of cars and trucks in the US—emerged from bankruptcy protection, recalls Jason Clark in The Prudent Speculator.

Since its restructuring, General Motors (GM) has endured continued doubts about its operational prowess and is working through a dreadful and very unfortunate ignition switch debacle.

All the while, it seems GM has kept its eyes on its mission and has been making significant strides to restructure its businesses and restore its image.

It seems that most investors are ignoring the company’s right-sizing, cost containment initiatives, global growth opportunities, record results, new product launches, and generous capital returns to shareholders.

Instead, folks appear to be avoiding the stock due to concerns about auto-loan demand, pricing pressures, and fears that global auto sales may have peaked, especially if China continues to struggle.

We have little doubt that competition, the strong dollar, and additional global operating headwinds will continue to impact GM, but we continue to be pleased with the company’s progress.

We also like that GM is moving aggressively to position itself ahead of the curve on a number of different auto trends, including the first truly mass-market electric car. It also has a sizable investment in Lyft, the major competitor of Uber.

As value investors, we find the current valuation to be attractive. GM currently trades with a forward earnings multiple of 5.4.

This multiple is below the firm’s 1-, 3-, and 5-year historical averages (8.0, 10.0, and 8.5, respectively) and is below the current forward earnings multiple of 13.7 for its global peer group.

Overall, GM has emerged as a stronger and more streamlined company following the 2009 Great Recession bankruptcy filing.

We think that the company’s solid balance sheet, cost controls, free cash flow generation, and shareholder capital return initiatives make the new GM an attractive addition to a well diversified portfolio.

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