Automotive giant General Motors (NYSE:GM) is still chastised for receiving government funding to fend off its demise during the height of the credit crisis. The coinciding trip through bankruptcy proceedings also helped clear billions of debt and legacy costs that were holding it back from competing successfully with larger rivals such as Toyota (NYSE:TM) and Honda (NYSE:HMC). It may take some time for the Government Motors stigma to subside, but like any company that is recapitalized, it has received a new lease on life that could end up quite lucrative for shareholders. 

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Full-Year Recap
Net sales advanced 10.8% to $150.3 billion. Vehicle sales made up the vast majority of the top line and advanced 10% to $148.9 billion. Financial services revenue related to helping customers and dealers lease and borrow its automobiles, accounted for the rest and grew five-fold to $1.4 billion. For the year, GM sold more than 9 million vehicles throughout the world and did so with a total of 207,000 employees.

EBIT advanced a healthy growth of 19% and reached $8.3 billion. Net income available to common shareholders jumped 62.5% to $7.6 billion, or $4.58 per dilutes share. (To know more about income statements, read Understanding The Income Statement.)

Outlook
GM only relayed that it expects to grow the top line in 2012. Analysts project modest total sales growth of roughly 3.4% and total sales just north of $155.4 billion. They expect earnings of $3.7 per share.

The Bottom Line
Thanks primarily to a trip through bankruptcy, GM has emerged as a healthy, profitable operator. It ended the year with $31.6 billion in cash on the balance sheet. It  goes a long way to covering pension and related post-retirement benefits, which were stated on the balance sheet as a long-term liability of $31.9 billion.

GM’s operations, along with archrival Ford (NYSE:F) and Chrysler, the latter of which made its own recent emergence from bankruptcy but no longer has a publicly-traded stock, is still very economically sensitive, but the trend for at least the next several years appears to support a continued recovery across the globe. At a forward P/E of only six, there appears to be significant recovery potential in the stock.

Investment positives continue to be a recovery in North American automotive demand, the low valuation and potential to grow financial services revenue significantly. And in similar fashion to international rivals, such as Tata Motors (NYSE:TTM), GM also has appealing growth potential in emerging markets, including China in particular. European trends remain a worry, but there weren’t many surprised during the fourth quarter. (For additional reading, check out 5 Must-Have Metrics For Value Investors.)   

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At the time of writing, Ryan C. Fuhrmann did not own shares in any of the companies mentioned in this article.  

 

Written by Daniel Guttridge

Low-priced stocks often tend to be more volatile in their price movements than higher priced stocks, but does that mean they should be avoided? What if both insiders in the company and institutions are buying them?

Insider Activity
Many analysts follow insider buying trends because, after all, insiders know more about their companies than anyone else. Their investment activity is closely monitored and can tell us a lot about where they feel the business is heading.

Here we look at insider buying as a percentage of the share float. Companies experiencing insider buying over the past six months provide an indicator that insiders think the stock is undervalued at current levels. Inversely, insider selling serves as a negative indicator. 

Institutional Activity
Institutional investors are also known as “big money” investors. They manage large pools of money such as mutual funds and hedge funds. When they invest in stocks, they can invest hundreds of thousands of dollars or more at one time. These transactions, called “block trades,” can have a significant effect on share prices.

Because institutional investors handle such large amounts of money, it is easy enough to assume that the big money managers know more than the average investor. This is why these investors are also sometimes referred to as “smart money,” and why their trades are so closely followed.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.

Business Section: Investing Ideas
We started this screen with stocks that were priced from $1-$5, and then screened for those with significant net institutional and insider purchases over the last quarter and last six months, respectively. Do you think the smart money has it right? (Click here to access free, interactive tools to analyze these ideas.)

1. Clearwire Corporation (Nasdaq:CLWR): Provides wireless broadband services. Market cap at $2.14B. Price (as of market close on 02/21) at $2.16. Net institutional purchases in the current quarter at 114.7M shares, which represents about 34.43% of the company’s float of 333.14M shares. Over the last six months, insiders were net buyers of 2,798,989 shares, which represents about 0.84% of the company’s 333.14M share float.

2. Synovus Financial Corp. (NYSE:SNV): A diversified financial services and bank holding company, provides commercial and retail banking, financial management, insurance, and mortgage services in Georgia, Alabama, South Carolina, Florida, and Tennessee. Market cap at $1.56B. Price (as of market close on 02/21) at $1.99. Net institutional purchases in the current quarter at 25.0M shares, which represents about 3.23% of the company’s float of 774.15M shares. Over the last six months, insiders were net buyers of 375,800 shares, which represents about 0.05% of the company’s 774.15M share float.

3. Cumulus Media Inc. (Nasdaq:CMLS): Engages in the acquisition, operation, and development of commercial radio stations in the United States. Market cap at $510.20M. Price (as of market close on 02/21) at $3.61. Net institutional purchases in the current quarter at 20.7M shares, which represents about 42.65% of the company’s float of 48.54M shares. Over the last six months, insiders were net buyers of 8,549,020 shares, which represents about 17.61% of the company’s 48.54M share float.

4. Dynavax Technologies Corporation (Nasdaq:DVAX): A clinical-stage biopharmaceutical company, discovers and develops novel products to prevent and treat infectious diseases. Market cap at $477.35M. Price (as of market close on 02/21) at $4.13. Net institutional purchases in the current quarter at 30.8M shares, which represents about 26.1% of the company’s float of 117.99M shares. Over the last six months, insiders were net buyers of 180,000 shares, which represents about 0.15% of the company’s 117.99M share float.

5. Corinthian Colleges Inc. (Nasdaq:COCO): Operates as a post-secondary career education company in the United States and Canada. Market cap at $412.57M. Price (as of market close on 02/21) at $4.86. Net institutional purchases in the current quarter at 2.5M shares, which represents about 3.25% of the company’s float of 76.98M shares. Over the last six months, insiders were net buyers of 110,000 shares, which represents about 0.14% of the company’s 76.98M share float.

6. Sequenom Inc. (Nasdaq:SQNM): Provides products, services, diagnostic testing, applications, and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural and livestock research. Market cap at $336.62M. Price (as of market close on 02/21) at $4.41. Net institutional purchases in the current quarter at 8.8M shares, which represents about 9.43% of the company’s float of 93.30M shares. Over the last six months, insiders were net buyers of 96,150 shares, which represents about 0.1% of the company’s 93.30M share float.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Kapitall’s Daniel Guttridge does not own any of the shares mentioned above. Institutional data sourced from Fidelity. Insider data sourced from Yahoo! Finance.

A New York State court has turned back a natural gas company’s bid to stop towns from banning horizontal hydraulic fracturing, potentially boosting local opposition to the controversial gas drilling procedure .

A New York State court has turned back a natural gas company’s bid to stop towns from banning horizontal hydraulic fracturing, potentially boosting local opposition to the controversial gas drilling procedure .

BY MATTHEW MOFFETT

BUENOS AIRES—A crowded commuter train that had apparently lost its brakes barreled into a station in a commercial area of Buenos Aires during the Wednesday morning rush, injuring some 550 people, Argentinian officials said.

Government officials said there were fatalities, but didn’t immediately say how many. Some trapped passengers were still being pulled out of the wreckage.

…

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More Cuts
Ultra Petroleum (NYSE:UPL) is planning to spend $925 million in capital in 2012, down from the $1.5 billion spent in 2011. The reduction in development drilling will be more substantial, with the company spending only $625 million in 2012, down 50% from the $1.3 billion of capital spent last year.

Ultra Petroleum will split this capital between the Marcellus Shale, which will see $400 million in spending, and the Pinedale Field, which will receive $250 million.

Ultra Petroleum said that the drastic reduction in dry gas spending was due to “limited economic returns in the current natural gas pricing environment.” The company said that new investments in natural gas areas would have to have a positive return at a $3.00 gas price. (For related reading, see A Guide To Investing In Oil Markets.)

Talisman Energy (NYSE:TLM) is reducing its exploration and development capital budget by $500 million relative to 2011, and will spend $4 billion this year. The company will put 80% of these funds towards areas that produce oil and liquids.

Talisman Energy plans to reduce drilling in the Marcellus Shale in 2012, cutting its operated rig count from the current level of 10 to as low as three rigs. The Montney Shale will also see cuts, with Talisman Energy reducing its operated rig count here from 11 to four rigs in 2012. 

Encana (NYSE:ECA) has set a $2.9 billion capital budget for 2012, approximately 37% less than the amount spent in 2011. The capital plan is designed to minimize investment in dry natural gas areas of its portfolio of assets. The company expects that this reduced investment will cut natural gas production by 250 million cubic feet per day during the year. Encana also plans to shut in up to 250 million cubic feet per day of natural gas production from existing wells to help reduce the oversupply of natural gas in North America.

Encana still plans to spend $1.2 billion in capital on dry gas plays on 2012, in areas where the company is involved with a joint venture partner, or in areas where drilling is still economic.

Energen Corp (NYSE:EGN) is cutting $45 million from the company’s planned investment in the San Juan Basin in 2012. The company plans to finish its highest return wells here by the middle of 2012 and then cease all drilling in this basin.

Energen Corp said that the reduction was due to the current outlook for low natural gas prices in 2012. The company plans to focus on the Permian Basin, where it will spend $855 million this year.

Summary of Drilling Reductions and Production Shut Ins
Chesapeake Energy (NYSE:CHK) – plans to reduce dry gas drilling expenditures from $3.1 billion in 2011 to $900 million in 2012. Production shut in of 500 million cubic feet of natural gas per day, with a contingency to increase this to one billion cubic feet per day if needed.

Comstock Resources (NYSE:CRK) – will end all Haynesville Shale development by March 2012.

Conoco Phillips (NYSE:COP) – will shut in 100 million cubic feet per day of natural gas production.

Exxon Mobil (NYSE:XOM) – no production shut ins, plans to shift some rigs from dry gas to wet gas plays in 2012.

BG Group (OTC:BRGYY) – plans to use an average of eight rigs in the Marcellus Shale and Haynesville Shale in 2012, down from 35 in 2011.

Unit Corporation (NYSE:UNT) – might reduce natural gas production by 20 million cubic feet per day in 2012.

WPX Energy (NYSE:WPX) – $400 million reduction in capital directed towards dry gas plays and 40% rig count cut.

BHP Billiton (NYSE:BHP) – cutting two rigs in the Fayetteville Shale.

The Bottom Line
Although the exploration and production industry is doing what it can to balance out natural gas supply and demand, the market may need to see more action or the short term bounce in natural gas price may not last. (For related reading, see A Natural Gas Primer.)

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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

Oil prices eased after soaring to a 9-month high after Eurozone PMI missed expectations. Concern over weak economic outlook in the 17-nation region re-emerged, upstaged the newly approved bailout package to Greece and escalated Iranian tensions. The front-month contract for WTI crude oil moved within a narrow range of 105.62 and 106.41 ahead of US opening. The equivalent Brent crude contract also eased a bit.

Supreme Leader Ayatollah Ali Khamenei said Iran’s nuclear policies would not change despite mounting international pressure against what the West says are Iran’s plans to obtain nuclear bombs.

BY HABIB KHAN TOTAKHIL AND DION NISSENBAUM

KABUL—Demonstrators armed with iron rods, wooden sticks and stones rampaged through the streets of Kabul Wednesday as outrage spread over the burning of copies of the Quran, Islam’s sacred book, at a U.S. military base north of the capital.

Afghan police unsuccessfully used rubber bullets to try to contain the confrontation as marchers targeted a U.S. military base inside Kabul, attacked Afghan drivers, stoned an Afghan military pickup truck and rushed at least one convoy of armored SUVs that appeared to be carrying Westerners.

“We want violence,” said Hamidullah, an Afghan taxi driver who was leading one of the protests …

By WILLIAM HOROBIN and NOUR MALAS

PARIS—The French government confirmed Wednesday that a French photojournalist and U.S.-born war correspondent have been killed in Homs, in Syria, a flash-point city in the country’s nearly yearlong uprising against President Bashar al-Assad.

Agence France-Presse/Getty Images

A handout picture obtained from The Sunday Times shows war correspondent Marie Colvin in Cairo, Egypt.

French government spokeswoman Valérie Pécresse said Marie Colvin, a foreign correspondent with The Sunday Times of London, and French war photographer Rémi Ochlik were killed in the bombardment of Homs.

A spokeswoman for The Sunday Times publisher News International declined to comment.

Mr. Ochlik had initially been in Syria for French weekly magazine Paris Match, but wasn’t working for them at the time of the attack. The photographer chose to stay in Syria when the publication decided to pull one of its staff reporters that worked with Mr. Ochlik out of the country for security reasons, said Phillipe Legrand, marketing director for the magazine.

Syrian activists in Homs said the two journalists were in a safe-house that came under artillery fire on Wednesday morning.

Syria’s government three weeks ago launched daily artillery attacks on Homs. Activists in the city said the attacks intensified over the weekend.

Ms. Colvin communicated with friends and colleagues Tuesday afternoon. She said she was horrified by the conditions in Homs, especially for civilians trapped by the shelling. She compared conditions to the siege of Sarajevo. In a phone conversation with the British Broadcasting Corp. on Tuesday, Ms. Colvin, who Syrian activists said was the only U.K. newspaper reporter in Homs, called the situation “absolutely sickening.”

“I counted 14 shells hitting just this civilian area, Bab al Amr, within 30 seconds,” she said.

At least four journalists have been killed in and around Homs since November last year, according to the Committee to Protect Journalists. France 2 journalist Gilles Jacquier became the first foreign journalist to be killed in Syria’s uprising in January, while he covered a pro-regime rally in Homs.

Syria’s government has largely barred foreign journalists from entering Syria or covering areas of unrest. Video footage and eyewitnesses have provided the bulk of accounts of events, with journalists sneaking into the country illegally over the past month—mostly into Homs—to document the crackdown.

Ms. Pecresse said President Nicolas Sarkozy “has asked me to express his condolences to the families of the two journalists who have been killed in the bombardments in Syria.”

“The government reiterates its commitment to both press freedom and the protection of journalists,” she said.

The Sunday Times is owned by News Corp., which also owns The Wall Street Journal.

—Alex Delmar-Morgan, Eric Chalmet, Margaret Coker and Sam Dagher contributed to this article.

Write to William Horobin at William.Horobin@dowjones.com