GM and Fiat Are Strong Buys, Expect More Energy Bankruptcies Ahead

GM (GM) and Fiat (FCAU) are bargains in a choppy market, while already troubled energy producers could see more carnage ahead, said George Schultze, CEO of Schultze Asset Management. Schultze said the overall trends of falling unemployment and modest economic growth in the U.S. will continue in 2016 and the Fed’s monetary stance will remain highly accommodative. He said the dollar will continue to strengthen relative to other developed market currencies, particularly the Euro and the Yen, reflecting the market’s belief that the Fed will remain the most hawkish of the central banks. In this environment, Schultze said he favors stocks over bonds given the high prices evident throughout the fixed income markets. In contrast to fixed income securities, he said equities can offer capital appreciation potential, increasing cash flow yields, and juicy dividends if picked properly. One of his favorite names is automaker GM, which saw its shares fall approximately 5 percent last year, despite a strong overall year for auto sales. 'It’s a cash flow machine,' said Schultze.