General Motors (NYSE:GM) is at something of a crossroads. On the one hand, GM has come a long way since the bad old days: It has minimal debt, over $30 billion in cash, and a rapidly improving product line.
Yet big problems remain. Many of its vehicles still lag competitors. It's burning huge sums in Europe. Its margins are dwarfed by those of its biggest regional rivals -- Ford (NYSE:F) in the U.S., Volkswagen (NASDAQOTH:VLKAY) in China.
Is GM's stock a buy, or something to avoid? I created a premium report on GM to help investors understand if GM is likely to follow Ford and return to glory, or crash and burn again under the weight of its long-standing problems.
Below is an excerpt from the report, laying out one of the three areas that anyone investing in GM must watch. We hope you enjoy it.
An area that GM investors must watch
GM's recovery is still an unfolding story. While there are likely to be important developments on many fronts in the coming months and years, anyone considering an investment in GM would be well-advised to pay close attention to three areas in particular, including this one: GM's ongoing product-line overhaul.
The product story
GM's latest models have been terrific, far beyond the so-so cars and trucks the company got by with for years. As nearly everyone who has ever bought a car and considered a GM product knows by now, that has not always been true. Many of the vehicles made by GM in the bad old days were far from competitive, victims of GM's longtime cost disadvantages and moribund, out-of-touch, corporate culture.
Like nearly everything else at GM, that is changing: The Chevy Cruze is the company's best-ever, mass-market compact, the Cadillac ATS is a legitimate competitor for BMW's (NASDAQOTH:BAMXF) much-vaunted 3-Series, and other entries have been similarly strong.
This product strength must continue if GM is to achieve its potential. GM's product-development programs, halted or slowed during its spiral into bankruptcy, are now working at a fast pace. Many new vehicles are due to launch over the next two years, including the replacements for GM's full-size pickups and SUVs.
Put plainly, they all have to be very good. Watch closely. If a major new product is less than fully competitive, consider the possibility that GM is faltering.
Looking for more guidance?
That was just a sample of The Motley Fool's new premium report on GM. If you're weighing whether the company is a buy or a sell, the report is an essential resource for investors seeking more information on the company. Not only that, but the report comes with updated quarterly guidance, and also dives into upcoming catalysts on the horizon. Just click here now to get started.
Fool contributor John Rosevear owns shares of General Motors and Ford. Follow him on Twitter at @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of General Motors and Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.