General Motors stock is down 45 percent over the last year, which would lead the uninformed to think that the automaker is still losing money by the bucketload. On the contrary, The General pulled in a healthy $7.6 billion in 2011.

Does that mother lode of cash make GM a buy for 2012? Capital research Global Investors seems to think so. The Detroit News reports that the investment firm has purchased 5.8 percent of the Detroit automaker. That's 92 million shares, which translates to about $2.3 billion at $25 per share.

The investment firm claims GM stock is a strong buy even though its European sales are lagging. David Kudla, CEO of Mainstay Capital Management LLC, points out that there are a lot of automakers selling vehicles in Europe, adding "everybody who does business there is struggling." The Capital Group also points to continued growth in the U.S. market due in part to pent-up demand as a reason for the big bet on GM stock.

Investment firm buys 5.8% of GM originally appeared on Autoblog on Fri, 17 Feb 2012 10:15:00 EST. Please see our terms for use of feeds.


More...