TICKERS IN THIS ARTICLE

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#GM24.29-0.38-1.54
GM
#TM68.26+0.12+0.18
TM
#F12.04-0.10-0.82
F
#AN34.10-0.29-0.84
AN
#AAPL419.81-1.58-0.37
AAPL
The United States is once again the world's fastest-growing auto market, as sales moderate in China and slow to a crawl in Europe.
That's good news for General Motors (GM -1.54%, news), the largest of Detroit's three automakers, but it also presents a challenge. The company has recently reclaimed the top spot in global vehicle sales it lost to Toyota Motor (TM +0.18%, news) in 2008, but at home, GM is still trying to shake off the stigma of its 2009 bankruptcy and federal bailout.
Its initial public offering in November 2010 helped lift the company out of the government's shadow -- although the Treasury Department still owns 26% of the automaker and is reluctant to sell its remaining stake at a loss. GM shares have shed more than one-quarter of their value from the IPO price of $33.
GM and Ford Motor (F -0.82%, news) sold record numbers of cars in China last year, benefiting from post-natural-disaster production disruptions at their Japanese rivals. But growth in China has already begun slowing from the 32% increase in 2010, as authorities there raise borrowing costs to fight inflation and phase out consumer subsidies.
GM's brand reorganization
GM's brand reorganization
The U.S. market, meanwhile, recorded its second consecutive year of at least 10% growth in light-vehicle sales in 2011, to 12.8 million, according to research from Autodata. And 2012 is projected to be even stronger.
AutoNation (AN -0.84%, news), the nation's largest auto retailer, with 250 dealerships in 15 states, expects U.S. sales to continue to grow as financing becomes easier and motorists get fed up with driving dilapidated vehicles. The average passenger car or truck is nearly 11 years old, AutoNation CEO Mike Jackson told Bloomberg this week. "We're going to take another step in the recovery this year, and we're on a journey back to 15.5 to 16 million" vehicle sales by next year, he said.

AutoNation CEO on Rising Car Sales

General Motors appears on a daily list created using StockScouter, an MSN Money tool that identifies stocks with strong growth prospects in the near term. All stocks with Scouter ratings of 8, 9 or 10 are considered for the list, which is then shortened to exclude those with a trading volume below 50,000 shares a day. The remaining stocks are ranked on the basis of market capitalization, sector membership and whether they are growth or value stocks.
The improved U.S. climate should help GM extend its momentum. It has been profitable for seven consecutive quarters, largely thanks to strong sales of new sport utility vehicles and small cars. Several of its product lines were suspended as GM was fighting for its survival in 2008.
The automaker required a $4 billion cash infusion from the Bush administration in late 2008, which allowed it to stay afloat until the Obama White House could manage a bankruptcy process and provide a $50 billion bailout.
The bailout remains a sensitive subject for GM and within a portion of the U.S. customer base. Divisions could intensify this year as the presidential election plays out. President Barack Obama and other Democrats have pointed to GM's re-emergence as proof that the company was worth saving. Some Republicans, including presidential contender Mitt Romney, have been critical of the government's role.
Around the time of the bailout, Romney penned the op-ed "Let Detroit Go Bankrupt," which appeared in The New York Times on Nov. 18, 2008. More recently, Romney has criticized Obama for allowing a restructuring of GM and Chrysler that put a portion of the companies in the hands of the United Auto Workers and other unions.
General Motors has a StockScouter rating of 8, meaning it is expected to significantly outperform the market over the next six months with average risk.
StockScouter top 10 for Jan. 6
CompanySectorDividend yieldForward P/EScouter score
General Motors (GM -1.54%, news)AutomotiveN/A6.48
Apple (AAPL -0.37%, news)Personal technologyN/A10.610
Applied Materials (AMAT -2.54%, news)Semiconductors2.7%9.610
CBS (CBS -1.18%, news)Broadcasting1.4%12.310
JPMorgan Chase (JPM -2.52%, news)Banking2.7%7.510
Medtronic (MDT -0.51%, news)Implantable medical devices2.5%10.510
Teva Pharmaceutical Industries (TEVA +0.66%, news)Generic drugs2.0%8.010
Wells Fargo (WFC 0.00%, news)Banking1.6%9.310
American Express (AXP +0.22%, news)Credit and travel services1.5%11.910
Chevron (CVX +1.07%, news)Oil and natural gas3.1%8.110

StockScouter beats the market

At MSN Money, we think the StockScouter rating system is about as good as it gets when you're trying to decide where to invest. StockScouter looks for stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the future, based on how those factors have influenced stock prices in the past.
The system assigns each stock an expected six-month return and balances that return against the stock's expected volatility. Scouter rates stocks on a scale of 1 to 10. Scouter ratings can change daily. Ratings and data in the chart above were current as of this article's publication date.
In addition to the daily top 10 list described above, StockScouter is used by investment research firm Verus Analytics (previously known as the quantitative business unit of Gradient Analytics) to generate a monthly benchmark portfolio of stocks that, refreshed monthly, has outperformed the market since its inception in August 2001.
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An investor who began in 2001 investing in each of the benchmark portfolio's top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with another 10 stocks, would have generated returns, before trading costs and taxes, of 701% through Dec. 31, 2011.
Writer Jon Markman, at the time a columnist for MSN Money, collaborated with company researchers on the tool. In this column, Markman suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that would yield different results, which would vary based on your starting point.
 
Performance through Dec. 31, 2011
Full 50 position portfolio
Index1 month3 month6 month12 monthFrom inceptionAverage annual return
Portfolio0.6%11.8%-2.0%2.1%351%16.4%
Nasdaq-0.6%7.9%-6.1%-1.8%28.5%4.8%
S&P 500-0.9%11.20%-4.80%0%3.8%1.7%
DJIA1.4%12%-1.6%5.5%16.1%2.7%
Top 10 portfolio
Index1 month3 month6 month12 monthFrom inceptionAverage annual return
Portfolio1.2%8.8%1.3%6.4%701%19%
Nasdaq0.6%7.9%-6.1.%-1.8%28.5%4.8%
S&P 500-0.9%11.2%-4.8%0%3.8%1.7%
DJIA1.4%12%-1.6%5.5%16.1%2.7%
Portfolio inception: August 2001