Are institutional investors starting to get interested in General Motors (GM) - Get Report again?

The No. 1 U.S. automaker, which filed for bankruptcy in 2009 and was reorganized by the U.S. government, left a trail of bitter shareholders, institutional and otherwise, in its wake. But a report from a service that tracks 13-F filings to the Securities and Exchange Commission noted that in the fourth quarter of 2015 127 pension funds, hedge funds and mutual funds initiated new positions in GM, increasing the number of funds holding the stock to 893.

In the aggregate, the funds owned 1.14 billion of the total of 1.54 billion GM shares outstanding on Dec. 31.

In previous cycles of U.S. automotive prosperity that were followed by downfall, investors tended to buy automakers when the industry's financial results were poor and sell them when profits were at their peak.

As former Wall Street equity analyst Joe Phillippi liked to quip: "You don't own an automotive stock, you lease it." In other words, investors buy auto stocks for cash flow and dividends rather than price appreciation; they're bonds with a possible equity kicker.

According to those principles, it might still be early to take a flier on GM. Indeed, the same tracking service that noted the net addition of institutional investors in GM also noted that holders lightened their positions at the end the fourth quarter by about 2.4% or 28 million shares from the end of the third quarter.

But some analysts have argued that current vehicle sales are at a peak or close to it. The automotive companies argue sales may be reaching a plateau yet still have a way to run. One reason for the industry's optimism is the depth of collapse during the global financial crisis, which created pent-up demand for vehicles that is playing out now.

Another reason for optimism that strong vehicle sales will persist a while longer is demographic data showing rising household formation by 22-to-38-year-old millennials. This cohort had delayed vehicle purchases and now account for a steadily rising 28% share of new-vehicle sales, second only to the baby boomers.

GM has shown other encouraging hints of improved discipline, skill and focus. The automaker's vehicles have won strong reviews and plaudits. And it's investing heavily in advanced technology, consistent with stricter regulation and trends like vehicle sharing and autonomous driving.

Conventional investment strategy often is challenged toward the end of a cycle by those who will insist that "this time is different." In the case of GM, conventional thinking would suggest selling GM stock now in the high 20s, when cash flow is strong and the $1.52 annual dividend looks secure.

Gutsy institutional managers are betting that the next down cycle will play out differently, that GM's financial results will stay relatively strong and the dividend won't be cut or omitted. Perhaps that equity kicker will materialize. Their investment thesis embodies a core belief that today's GM is a fundamentally stronger, more disciplined company than its predecessor.

Doron Levin is the host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, encore Sunday at 9 a.m.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.