The Long-term Is Still Bright at Ford
Let’s take a look at the automaker’s third-quarter performance.
GM
Ford Surprises to the Upside; GM Distracted By Recalls
Sometimes it’s easy to fall in love with a company and its products. This, unfortunately, can become a behavioral and psychological barrier to financial outperformance. Whether you are a Ford or Chevy guy or gal determines little about how successful you will be as an investor in auto stocks. The most important determinant to financial outperformance in the auto space is not based on which type of car or truck you drive (or like), but instead, it is based on understanding and capitalizing on the factors that drive stock prices. To this point, stock prices are driven, of course, by the buying and selling of shares, and the buying and selling of shares is primarily influenced by a company’s intrinsic … Read more
Ford’s China Sales Continue to Impress
June proved to be another great month for Best Ideas portfolio holding Ford (F) in China (1). First-half sales numbers, released Monday, increased to nearly 550,000 wholesale vehicles compared to just over 400,000 in the first half of 2013. Ford’s June sales alone increased 17%, to 87,783. The news showcases Ford’s continued sales momentum in the country, something we’ve been monitoring closely for some time. The Ford Focus, Ford Kuga, Ford Mondeo and the Ford EcoSport have been key sources of strength, with the Focus becoming a huge hit with consumers in the country. A latecomer to China, Ford may be trailing early-movers such as GM (GM) and Volkswagen (VLKAY), but the automaker’s rate of sales growth continues to significantly … Read more
Valuentum Economic Castleâ„¢ Rating Update
Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more
Ford Announces $1.8 Billion Share Buyback; Reports Strong April Sales Growth in China
We believe investors have a tremendous opportunity to be holders of Ford’s (F) equity. We can do a deep dive into the reasons why in this article, but we encourage members to peruse our website, especially Ford’s landing page to examine our investment thesis on the automaker. On Ford’s landing page, members can view the company’s 16-page equity report and its dividend report, as well as a list of the recent Valuentum commentary on the company and the firm’s corporate press releases. Our website may be slightly different than others’ in that we house pdf reports of firms on their respective landing pages — in addition to providing articles and press releases and other content. We can’t possibly put all … Read more
Ford’s Opportunity in China
Asia Pacific Africa “Ford’s strategy in Asia Pacific Africa is to grow aggressively with an expanding portfolio of global One Ford products with manufacturing hubs in China, India and ASEAN… …In the fourth quarter, wholesale volume was up 29 percent from a year ago, and net revenue, which excludes the company’s China joint ventures, grew 16 percent. Ford’s wholesale volume in China was up 45 percent in the fourth quarter and about 50 percent for the full year. The higher volume in the region mainly reflects improved market share. Higher industry volume, increasing from a SAAR of 33.1 million units to 38.1 million units and favorable changes in dealer stocks also contributed. Higher revenue primarily reflects favorable volume and mix. … Read more
Best Ideas Portfolio Holding Ford Puts Up Fantastic March Sales Numbers; Best in 8 Years!
It seems like yesterday that we were “pounding the table” on scooping up shares of Best Ideas portfolio holding Ford (F). Of course, looking back, the transaction email alert was in May 2012 at just over $10 per share. Though that doesn’t mean much for new members, we think Ford is still a fantastic idea to gain exposure to pent-up demand related to the domestic auto recovery and global demand for auto adoption, especially in emerging markets. The speculative money is flowing into Tesla (TSLA), which to the firm’s credit is turning a lot of heads, but we think the “smart” money continues to be in Ford. Shares of Tesla are just too risky for even the most risk-seeking investor, and … Read more
Ford’s Pension Under-fundedness Under Control; Magnitude of Stock Price Multiple Discount Unwarranted Even After Considering Operational (cyclicality) and Financial (Ford Motor Credit) Risks
Executive Summary: Ford has been a solid performer in the portfolio of the Best Ideas Newsletter. Though 2014 may not be its best year, we think the best times at the company are still ahead of it. A sub-10 trailing earnings multiple is too harsh, even after considering operational (cyclicality) and financial (Ford Motor Credit) risks. We couldn’t be happier with Ford’s (F) performance during 2013, results released January 28. Full-year 2013 pre-tax profit of $8.6 billion advanced more than $600 million from the mark in the same period a year ago and represented one of Ford’s best years ever. The company’s full-year earnings per share of $1.62, which jumped $0.21 from the same period last year, implies a trailing … Read more
Throw December Auto Sales Numbers Away; December Ice Storms and a Late Thanksgiving Holiday to Blame
The excuses for the subpar selling performance at automakers in December (up just 0.3%) were many: the frigid ice and snow storms that scared customers away; a late Thanksgiving holiday that stole sales from the month; and a shortened holiday shopping season that left consumers scrambling to buy holiday gifts for family and friends, as opposed to spending time car shopping. Though the impact of each contributing factor is difficult to measure, we think the combination of these items was the main culprit for disappointing December auto sales, not that the consumer has decided to forgo car purchases and that the upswing in auto sales has come to an abrupt halt. Some caution is starting to creep into the market—see … Read more
Three Reasons Why Dividend Growth Investors Are Quite Savvy
A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more