You keep focusing on how high a stock can get in terms of PPS. Forget about that. Just worry about market cap, and your share of it. I will agree with you that the upside is much more limited today than it was in November 2008. Remember that at that time bankruptcy was not just a possibility, but a high probability. The market cap was very small at that time. It adjusted roughly 10x along with the PPS. From here, we might go from 12 to 36 in the course of a year or two, which is 3x market cap. Expecting more than that is unrealistic in my view. But since bankruptcy has all but removed from the realm of possibilities, I don't expect Ford to appreciate 10x in such a timeframe. Fooling around with buybacks and retirement of treasury shares is not going to change that. 10x is quite possible on a longer timeline, in my opinion. But I'm not currenlty holding Ford looking for those kinds of gains.
That was my point. Ford has the ability to further ramp up production with its existing infrastructure. The closer they are to 100% utilization, the better it is for profits. Adding shifts, and cranking up the speed on existing lines are options for making more vehicles with existing plants. And with that extra volume, there should be no need to add overhead, thus fixed costs remain the same.
Thanks, ob/oblameya. (The article on the new S&P rating is by Brent Snaveley. The Detroit Free Press is a division of Gannett.)
Sample of the tidbits in the article:
"upgraded Ford's credit rating two notches to BB+ because of the Dearborn automaker's improving financial condition and the ratification of its new labor contract with the UAW.
... Ford's objective when it began negotiations with the UAW in July was to keep its fixed costs down so that it could convince rating agencies to boost the company's credit rating. A higher credit rating helps a company reduce interest rates on its debt. Ford's debt hasn't been rated as investment grade since 2005."
Hey JB....Is there any way ford can get rid of some of there shares with out buying them back? Like just retiring them? Cuz theres no way ford could get over 25 with 3.8 bil shares. In the next 2-3 years they could be a 50-60 stock if they had less shares. Like TM...dont you agree??