How do you know that Ford isn’t a falling knife or some such thing today ? I don’t !!

– I don’t know.

– It could fall further. Just look at the last five year chart here and the max chart here ; you will notice that there are many months and years when Ford has been far below the $ 9.39 .. i.e. today’s price

– This isn’t the business of making Tablet computers , smart phones or the next Wonder drug. Things change slowly in this field, we change cars every 10 years or so on an average !! and so there may be no “known” reason for a pop tomorrow morning

– Unless you are some institution with 10s of millions of shares and have a plan, it would be difficult to know how deep the cut could be and how far the knife could fall or where it may turn

 – The Japanese have been in and out, oil spikes have come and gone, new emission rules keep comming, emerging market talk has been there for approx 10 years now …. and “Ford” has had been rolling along, rolling along rather well since Alan Mulally took over

Will “Ford” survive the next 10 years ? to me, it looks much more easier to say yes today, than it was 4 .. 5 years ago. Yes IF “Ford” survived the depths of the meltdown and customer fears in 2008 – 2012, it will survive the next 10

– North America is “Ford’s” forte. North America is the best place to be in today’s world. that’s another short to medium term plus for “Ford”

– Will cheaper Nat Gas help “Ford” ; yes if they are at it earlier;

– People like big cars, big homes …. many things big…. The downside to a big car is the fuel cost. Suddenly there seems to be abundance of fuel and all “Made in America”….with Natural Gas. so when this Natural Gas thing gets to passenger cars, that will help the American Automakers

– If there is one strong area for the American automakers, it is the large trucks and SUV ...basically the fuel guzzlers…. and now with cheap Nat Gas that niche could be turned into a win win. An advantage to “Ford” with better margins on bigger vehicles and an advantage (in terms of less cost for a given pride) to the customer

– So….. what is the outlook !! for Ford now ?

 – they are making lot of cash

– they have started paying dividends and IF they continue to be prudent they will increase shareholder paybacks

– The Europe thing is a distraction and will depress the share price … and advantage for the real long term buyer …

– Interest costs do not seem to be moving up in a hurry. Europe will take care of the sentiment in that area !! for at least an year or two

– “Ford” stock price is below the $ 10 mark, where I think the shares are prized with a 25% MOS [ meaning value in the $13.xy range ]

– they have had no major disasters like the Toyota or others ….

 

…. so …. don’t bet the house on it …. but don’t worry to take a sip

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About supiramani

Finance Professional ; In self denial about 'having understood the market'! ; looking for the next million dollar idea ; Not broken out of the mold
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