The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By David Sterman NEW YORK ( StreetAuthority) -- Every few months, hedge-fund managers take a fresh look at the economy, trying to figure out key trends that will yield the best returns in the months ahead. Once they complete their analyses, they rotate some money out of sectors that no longer appeal into sectors that provide the freshest upside. With 2011 winding down, this is a good time for individuals to anticipate where the action will be later this winter, and on into the spring and summer. To be sure, as I've
Auto-parts suppliers such as Lear ( LEA) and Magna International ( MGA) are 30% to 40% off of their 52-week highs and look awfully tempting trading at seven or eight times projected 2012 profits. Yet two publicly-traded auto stocks may be the biggest bargains of all, trading at even lower multiples. GM ( GM)
represents the biggest value in the group, as its entire operations are assigned zero value after its net cash is excluded from the market capitalization. Ford ( F) represents the better operator of the two. Which one appeals the most depends on your investing preference.
Risks to Consider: Right now, the risks start and end with Europe. The U.S. economy appears to be on the mend, but a deep slump in Europe would blunt any momentum we may be seeing here at home. Action to Take: Keep your expectations in check. Few of these stocks (outside of Ford, GM and Delta) appear capable of really big stock price gains in 2012. But all appear poised to deliver respectable 20% or even 30% returns in the coming year if the U.S. economy keeps showing signs of improvement. Disclosure: Neither D. Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article. Also see:
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