NEW YORK (TheStreet) -- Not long ago it was time for me to buy a new car. I test drove Hondas, Acura, Toyotas, Lexus, BMWs and a Buick LaCrosse made by General Motors (GM) - Get Report.

Except for the counterintuitive parking brake I really like the feel of the Buick and the solid, smooth ride. It seemed to have the German engineering that one would expect from a BMW or the top-of-the-line



model. (By the way, VW may be the most underpriced auto stock at the moment.)

Since I wrote this article Friday, Dec. 21, the day the world was supposed to end, I can't resist showing you what a colleague sent me. He wrote, "We suppose there's still time for this forecast to pan out, but it seems increasingly unlikely."

Buying a GM product had one disadvantage. Its gasoline mileage wasn't nearly as good as the comparable Volkswagen model that tempts me greatly as a second car. Now that I'm a proud owner of a Buick (it's my second Buick over the past 20 years) I've begun following shares of GM.

Whether there's a so-called "fiscal cliff" fall or a last-minute deal, GM is moving forward with vigor and determination. Friday's

Wall Street Journal

heralded the company with the headline "GM, Peugeot Widen Alliance."

The companies will accelerate a 10-month project to build a 3-cyclinder gasoline engine which comes on top of a mutual plan to develop three platforms for a series of small and compact models. These cars will be sold under GM's Opel and Vauxhall as well as

PSA Peugeot Citroen's


Peugeot and Citroen brands starting in 2016.



article stated, "The Franco-U.S. alliance, sealed in February when GM bought a 7% interest in Peugeot Citroen, is being watched closely because the two auto makers are struggling to reduce heavy losses in their European operations, which have been battered by slumping auto sales and a price war."

GM's European division is on track to lose somewhere between $1.5 and $18 billion this year, depending on the costs of restructuring. The company's European division lost $747 million in 2011.

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Volkswagen, by contrast, had worldwide quarterly earnings growth (ending Sept. 30) of over 60% and quarterly revenue growth (year-over-year) of nearly 27%. Talk about a stock that is undervalued! Even though VLKAY is selling near its 52-week high, its forward PE ratio is only 6.63 and its price-to-earnings-to growth (PEG) ratio (five-year expected) is a phenomenally low 0.07.

GM shares have a one-year price chart that looks like an "inverted head-and-shoulders" formation, technically speaking. Its chart below shows quarterly revenue-per-share growth has been outstanding.

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When the federal government orchestrated a bailout of GM, few thought that the big auto and parts manufacturer would rebound so quickly. Its latest plan to spend $5.5 billion to buy back shares comes as the Obama administration works to wind down financial-crisis era programs from the inherited financial fiasco that culminated in 2008.

Initially the stock repurchase announcement last Wednesday sent GM shares surging 6.6% and closd that day's trading session at $27.18. In spite of options expirations and disappointment over the inaccuracy of those who tried to interpret the Mayan calendar, shares were trading Friday above $27.

GM stock trades at a forward (one-year) PE ratio of 7.17 and if you like the number 7, you'll be pleased to know its five-year expected PEG ratio stands at 0.77. As of the most recent quarter ending Sept. 30 its year-over-year quarterly earnings was -13% and quarterly revenue growth was a positive 2.3%.

In the most recent quarter its total cash was almost $32 billion while total debt was a more manageable $16.65 billion. In comparison with Volkswagen's total cash of around $26 billion and total debt of over $119 billion, GM's financial balance sheet is looking better and better.

It may be too early to say, as the late Etta James would sing,

"At Last"

, but it looks like GM has a chance to glide off the fiscal cliff and soar into a thermal updraft of low interest rates and global monetary easing.

By the way, the federal government still has GM shares left at the Treasury. They were purchased at an average price of $69.72 a share, so GM's stocks needs to go up over 250% for the government to come close to breaking even. This gives shareholders a hint for an upside price target.

"Moving to exit our investment in GM within the next 12 to 15 months

hint, hint is consistent with our dual goals of winding down

the Troubled Asset Relief Program, aka "TARP," as soon as practicable and protecting taxpayer interests," Treasury Assistant Secretary for Financial Stability Timothy Massad recently said.

GM's stock repurchase will be accretive to earnings per share, reducing the company's total shares outstanding by about 11%. According to the

Wall Street Journal

, GM expects to take a charge of approximately $400 million in the fourth quarter, which will be treated as a special item. Its next earnings report is scheduled for Feb. 11.

General Motors is expected to finish 2012 with an estimated liquidity of about $38 billion. Last Wedneday the company announced it's bringing the Chevrolet Camaro back to America. The new-generation Camaro will be built in Lansing, Mich.

The company did not say when this will happen, citing competition reasons. The Camaro was built in the U.S. until 1992, when GM moved production to Quebec, from Van Nuys, Calif. The Canadian government was given a 9% stake in GM back in 2009 in exchange for providing it with bailout money. A story in the

Wall Street Journal

estimates that the Canadian government owns over 156 million GM shares.

So despite economic hiccups, morose media stories and a rather sordid past, GM appears to be moving in a productive direction. With both the U.S. and Canadian governments as shareholders, the pressure will be on the leadership of GM to goose the share price higher, and maybe someday pay a dividend to boot.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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