​Where's the love for GM and Ford shares?

What's obvious doesn't always attract immediate attention. So, it isn't surprising that investors often miss or ignore some obviously good investment opportunities. In that category now are two widely known global brand names: General Motors (GM) and Ford Motor (F). Both are on course to have a good year in 2016, possibly exceeding their already impressive performances last year.

Yet their shares remain underpriced and largely underowned, according to industry analysts, even though the U.S. auto business has been on a tear. Sales have been robust, fueled by a steadily growing economy, a better product mix with innovative technology, improving consumer confidence and, yes, the plunge in oil prices.

Most investors, however, have yet to recognize how much the auto industry has recovered and triumphed since 2010. That's at least partly because of the stock market's extreme volatility and dismal showing so far this year.

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But investors should probably pick up on what's now quite obvious: The auto industry is one of the U.S. economy's leading lights, and the business fundamentals at both GM and Ford have been vibrant in recent years. "Sales have been strong throughout 2015 and may just hit a new high" this year, noted Value Line Investment Survey in a recent study on the auto industry. Value Line's estimates call for sales to possibly challenge the all-time record of 17.8 million in 1999. Already, sales of cars and trucks in 2015 hit 17.5 million.

And rising sales volume isn't the only significant fact. Nearly all of the gains have been generated by light-duty trucks, (such as pickups, SUVs, crossovers and minivans), which generate heftier profit margins than car models. Factors contributing to this surging demand, said Value Line, include low gas prices and interest rates, an improving job market, a recovering housing market -- and "America's long-standing love affair with pickups."

Shares of GM, the world's second-largest maker of cars and trucks, continue to beckon, rising from $24 a share to around $34 by year-end 2015. They've slid along with the overall market this year, closing at $28.52 on Feb. 5. -- a good distance from the 52-week high of $39.

"Business on the home front remains robust," noted Value Line analyst Mario Ferro, and he expects demand in China will soon get a boost. "We like the stock for the long term," Ferro said, as GM's "management looks for earnings to accelerate over the next several years, with double-digit share net growth." He added that patient investors also stand to benefit from the stock's "solid yield." GM's dividend yield has risen to 5.33 percent.

GM posted a record net income of $9.7 billion, or $5.91 a share, for 2015, way up from $2.8 billion, or $1.65 a share, in 2014. For the fourth quarter, the company reported profits of $6.3 billion, or $3.92 a share, up from $1.1 billion, or 66 cents a share. Total revenue for 2015 was $152.4 billion, off from $155.9 billion in 2014, largely due to the negative impact from foreign exchange fluctuations.

Efraim Levy, analyst at S&P Capital IQ, who rates GM a "strong buy," said the company achieved another "powerful North American performance" in the fourth quarter. And in China, GM's equity income rose to $600 million in the fourth quarter, as the company's "product positioning" helped it gain market share in the country.

Levy has a 12-month price target for GM of $42 a share, or 7.7 times his 2016 earnings estimate of $5.45 a share. "We see GM as attractive for total return potential," said Levy, amid strong global volume growth. And even as he expects a peak in volume growth in 2016, Levy said he sees "relative stability in 2017 sales."

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Shares of Ford, the second-largest U.S. producer of trucks and cars, have slumped to $11.45 a share as of the Feb. 5 close, from more than $15 late last year. That's in large measure because of weaker sales in several foreign markets due to stiff competition from Asian automakers. But the stock's decline should only enhance Ford's attraction to investors, given that it's a major participant in one of the nation's most important industries and a global leader.

Indeed, despite Ford's strong performance in generating record sales, its stock has fallen nearly 6 percent over the past month, noted Buckingham Research Group, which continues to rate Ford as a buy, with a price objective of $18 a share. "We reiterate our buy rating in shares of Ford, following what we deem to be a conservative qualitative guidance for 2016, and the issuance of a $1 billion special dividend (25-cent a share)," said Buckingham.

Ford's automotive revenues in 2016, operating margin, pretax profit (excluding special items) and operating earnings-per-share are all expected to be equal to or higher than 2015 levels, predicted Buckingham. The investment research firm believes the company's guidance could prove to be "conservative."

S&P Capital IQ's Levy, who rates Ford as a "strong buy" with a price target of $17, projects Ford revenues in 2016 to rise 3.7 percent, boosted by increased global demand, a better U.S. model mix and full-year sales of some new products in the U.S., including the new Ford-150 pickup. Earnings from the financial services unit, a significant contributor to Ford's profits, are likely to equal if not exceed 2015 levels, said Levy.

"We see profit expanding in 2016 as Ford benefits from new products and favorable mix, improved international margins outside South America," he argued. Cost-cutting should benefit Ford across regions, and its profitability in Europe, Levy pointed out, should improve even with problems in Russia. In the U.S., he believes Ford's market share will be challenged by intense competition but will benefit from new products.

Levy sees Ford's earnings rising to $1.97 a share in 2016, from an adjusted $1.93 in 2015. His $17 share price target is about 8.6 times Levy's 2016 earnings estimate, based on historical and price-earnings analysis. Levy noted that Ford is trading at a premium price-earnings multiple to its closest peer. He expects the 60-cent annual dividend to be increased over time. The stock currently has a dividend yield of 5.24 percent. Said Levy: "We find Ford attractive for total return potential."

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