GM’s revenue has increased by nearly 46% since 2009. Profits returned to the company in 2010, but investors should be cautious, as sales dropped from $7.6 billion in 2011 to $4.9 billion last year. Watch for increasing electric-vehicle sales before picking up this stock.
GM has also recently recalled 480,000 vehicles due to fire risks. Originally, the recall was 249,000 vehicles last August when GM SUVs had a short in a circuit board. However, an additional 231,000 sport-utility vehicles with an apparent danger of having an electrical short were recalled on June 17.
AIG turns a corner
With AIG selling its Asian life insurance division, the company is attempting to optimize performance and that has resulted in many hedge funds picking up the stock. In fact, the company is now the most-owned stock by hedge funds, replacing Apple Inc. (NASDAQ:AAPL). The refining process is sure to help AIG grow, and the company has been improving its return on invested capital in the process, showing business savvy and a likely ability to increase in share value.
AIG hasn’t had quite as an abrupt increase in revenue as the other two companies — actually, annual revenue fell by 15% since 2009, but revenue did increase by 27% last quarter over the previous period, which is a sign the tables could be turning. I consider buying this stock to be moderately risky, but the long-term upside could be huge.
Looking up
While General Motors Company (NYSE:GM) and American International Group Inc (NYSE:AIG) celebrate reuniting with the S&P 500, Bank of America Corp (NYSE:BAC) has its own reason to pour the bubbly. The company is finally able to address many of the mortgage problems that have plagued this stock. A court date has been set that will address the $8.5-billion settlement between investors and the corporation. The company allegedly owes investors money for the bonds that were purchased when Bank of America Corp (NYSE:BAC)’s Countrywide Financial was selling them.
Finally paying off those debts will make the stock more attractive to buyers. The bank is also making an effort to change public perception about the company by initiating an “express your thanks” campaign. The effort aims to raise $1 million for military members who were wounded in service.
B-of-A continues to perform well with net interest income after loan-loss provision (bank revenue) at more than $32 billion last year, compared to negative $1.4 billion in 2009. Furthermore, the company’s loan-loss provision is decreasing as people are better able to pay off their loans. In 2009, the provision ate up nearly all of the company’s $48.7 billion interest and fees on loans. Last year, however, loan-loss provision only amounted to $8.1 billion, or 21% of interest and fees on loans. Total debt at the company was also less than $600 billion at the end of 2012, which is down from more than $763 billion in 2009.
Gains are still ahead
While investing in great companies that were hammered by the recession would have been a better idea in early 2009 before share prices started to recharge, these companies still have a lot of room to grow. With all three stocks, significant gains are likely in the next month, so now is the time for the long-term investor to buy before these stocks are fully valued. The recent news at these companies is arguably the most significant positive development since the recession, and the companies look poised take back the roles for which they were once respected.
Few companies lead to such strong feelings as General Motors Company (NYSE:GM). But ignoring emotions to make good investing decisions is hard. The Fool’s premium GM research service can help, by telling you the truth about GM’s growth potential in coming years. (Hint: It’s even bigger than you think. But it’s not a sure thing, and we’ll help you understand why.) It might help give you the courage to be greedy while others are still fearful, as well as a better understanding of the real risks facing General Motors Company (NYSE:GM).
The article Stocks Still Hammered by the Recession Are About to Surge originally appeared on Fool.com.
Phillip Woolgar owns shares of Bank of America. The Motley Fool recommends American International Group, Bank of America, and General Motors. The Motley Fool owns shares of American International Group and Bank of America and has the following options: Long Jan 2014 $25 Calls on American International Group. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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