I wouldn�t give you a pitcher of warm spit for Ford. Having said that, I�m genuinely impressed by the resistance this stock has shown in light of the 2006 performance. Perhaps my convictions are blinding me to something quite obvious to many others. For those of you who think that this stock represents a better bet than all of the other choices out there, some questions:
1. Is F a classic contrarian play with nowhere to go but up after loosing $45 million per working day in �06?
2. What about their debt load? Interest at 5% = $32 million per working day. It's also worth $82/share.
3. How will the huge debts being carried by U.S. consumers impact domestic sales in the softening 2007 economy?
4. What about the product line? Overall, in line with, as good as, or better than the competition?
5. Will F continue to loose mkt share and what can we expect from the competition going forward?
6. How long before there are 3 consecutive quarters of positive cash flow and sustained profitability?
7. What are Ford�s assets worth in a saturated market and if F doesn�t turn a profit very fast, how will this impact share price?
8. Between 2001 and 2006, Ford lost $12.5 billion. What does this say about its management team?
9. The big economies have been awash is liquidity for 3 years. If you can�t make money in these conditions, how will you survive going forward?
10. Is the progress made on the labor front in �06 enough to offset the competition�s advantages?
11. What happens if oil climbs to $100/barrel in 2007? Can F compete better in the small car market?
Admittedly, these are biased questions, but I don�t think they�re of the �Are you still beating your wife?� variety. For the life of me, I can�t see what the upside is to Ford, given the risks. Any serious takers? (Iraq, Bush, Hilliary, Rummy � are words that cannot be part of serious answers.)
Best of luck to all and remember that every trade ever made on any stock market over all recorded time took place between 2 people who shared diametrically opposed views. Be thankful for those who disagree with you, we desperately need each other, whether long or short.
You chose the negatives, but I suspect you chose them because you feel Ford just may be a pretty good investment, and you want some assurance that if you invested, it would be a pretty good move. Well, I think it would be. Mulally will bring this company back in to discipline. And Mulally knows it all depends on product. It's going to sell or it won't. So how do you feel? You want to buy the stock? You apparently did a lot of research. As for me, I buy the stock, then I sell it. I buy it again, then I sell it. I like to time it like a game of ping pong, which I'm pretty good at. I think I could answer your question as to the upside of Ford, but I would be revealing information not to the interest of my personl investing. So I decline. I rely on Ford to keep me in mad money which I use for silly things like new fishing boats, TV sets and other toys. Can Ford succeed? Maybe. Can they succeed for two or three years? Oh yes. I think we have some time to play.
My crystal ball shows me a very healthy,revitalized and profitable ford in the future---This icon of a company has many more supporters than the few shorters here who would sell their mothers out to make a few bucks--FORD will be on of the surviors down the road many auto companies will not have the assets or backers to stay afloat--case in point ford along with others just bid on a small eastern european company that is in BK --if bk was an imminent concern for ford they wouldn,t be expanding all over the world--they have MAJOR problems in the us and canada these problems will be resolved--the gov,t may yet get involved on the health care issue-which will help--The US needs ford and gm and as the head of toyota even stated. The biggest questions facing investors is how soon not if but when we need to be patient and we will be rewarded--I have personally had very good experiences with my ford products and will continue to be a purchaser--wwe routinely put on well over 100k/vehichle--some over 200 and a 95 winstar over 300k--all with very little maintinance or trouble--I cannot say my experiences with foreign vehicles(I have had many)were nearly as trouble free--I will NEVER EVER BUY ANOTHER ASIAN BUILT vehicle.
My view is that historically the three major U.S. auto manufacturers have rallyed after seeing the grim reaper at the door step. Not a technical analysis and one of these days we may lose GM, Ford, or Chrysler but they seem to have a knack for pulling it together when the days are darkest. Maybe its because bad times give them more leverage in negotiations with UAW. Ford is certainly a risky play and I wouldn't put more than one egg is this basket.
Ford can surely rally. They need some hot cars that sell big time and Ford should be capable of designing a "game-changing" car and doing a good job of selling it. The Taurus in the 80's is a good example of having done it before. Given where they are now, they probably need a succession of major sales success stories. For sure they need to get replacements for the SUV�s to market ASAP.
All of the automakers, both domestic and foreign have access to the same technology and design capabilities which have become global businesses that can be bought in. This means that in terms of creativity and marketing savvy, Ford can at least count a on a level playing field.
What is more of a pickle is how they pull out of this dive when they are carrying so much effing debt. As I understand it, they've pledged all of their assets to the banks in order to shore up their short and medium term financial situation and there is no going back to the well. Seems to me that this leaves them will very little wiggle room in a very tough market that may well be headed for a major consumer slowdown.
Holding 2000 shares at $7.25/sh, and like you, I'm shocked at this stock's resistance. You can still sell a $.40 June $9 call which is 15% on your money from the current price! The only thing you left out in your analysis, is the REMOTE possiblity of a merger/buyout, although who'd want it with all this debt and troubles? However, there is no end to surprises in the corporate world. Perhaps after all the restructuring, someone may see this as a startover opportunity.
We owned Chrysler from $10 to $40/sh, and was shocked to see the Daimler buyout of an American icon like that, although Chrysler had obviously recovered. Again, I'd be shocked at a merger after all that talking that has already taken place, but we have a new CEO with "fresh" eyes.
The float is only 1.8 Billion shares w/ 63% of the shares held by institutions. Anyone think those INSTITUTIONS are going to let this thing fall to where it belongs...they'll get a government loan guarantee first and if you don't think it wouldn't happen...let's see...BIG MONEY and THE UAW converging on Congress...hmmmm? Senate vote...100-0 in favor...House ...there might be a couple of maverick votes...just a couple! Henry Ford's family, bankrupt? Naw!