Ford (F) Shares Set for Overdrive
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Price: $14.90 -2.87%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 5.8%
Revenue Growth %: -3.0%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 5.8%
Revenue Growth %: -3.0%
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Shares of Ford (NYSE: F) have a healthy bid early Monday following a positive write-up in this weekend's Barron's.
The article notes the company has been aggressively cutting debt, boosting sales and readying new models for key growth markets China and India. While its stocks isn't reflecting the action, Ford has been firing on all cylinders.
At 6.1x forward earnings, shares are cheap. Many analysts believe the stock could easily top $15, Barron's notes.
Despite a weak economy, Ford grew sales 13 percent in the second quarter. In addition, Ford paid off another $2.6 billion in debt last quarter - bringing total debt to $14 billion. Debt could fall further to $12 billion by year end.
When uncertainty from UAW labor negations clear, Ford's credit rating could be lifted back to investment grade which would reduce the company's borrowing costs.
Ford plans to introduce 16 new cars in China and India in the next four years. Ford is looking to catch rival GM (NYSE: GM) which has 15 percent of the China market, versus Ford's 3 percent.
The U.S. market is also getting new Ford vehicles. The company is planning new Lincoln models and giving the Fusion a makeover. The new "eco-boost" engines for the Explorer and Edge are also slated.
On car lots, Ford's inventory is under control versus high dealer inventory for GM. Ford's dealer inventory is 36 days, versus 68 days for GM.
While Japan automakers will recover some of the lost market share from Ford, the company's own sales numbers are expected to continue to grow.
A question expected to be answered over time will be what the company will do with its rising cash hoard, which could hit $10 billion in early 2012. Investors may seek a special dividend or stock buyback. While the CFO told Barron's the company will "review all options" for the cash, he was overheard at a recent analyst meeting whispering "over my dead body".
Ford looks poised to rise, Barron's claims. A special dividend or a buyback could make this turbocharged machine "fully loaded".
Share of Ford are up 3.1 percent to $12.59 in pre-open action.
The article notes the company has been aggressively cutting debt, boosting sales and readying new models for key growth markets China and India. While its stocks isn't reflecting the action, Ford has been firing on all cylinders.
At 6.1x forward earnings, shares are cheap. Many analysts believe the stock could easily top $15, Barron's notes.
Despite a weak economy, Ford grew sales 13 percent in the second quarter. In addition, Ford paid off another $2.6 billion in debt last quarter - bringing total debt to $14 billion. Debt could fall further to $12 billion by year end.
When uncertainty from UAW labor negations clear, Ford's credit rating could be lifted back to investment grade which would reduce the company's borrowing costs.
Ford plans to introduce 16 new cars in China and India in the next four years. Ford is looking to catch rival GM (NYSE: GM) which has 15 percent of the China market, versus Ford's 3 percent.
The U.S. market is also getting new Ford vehicles. The company is planning new Lincoln models and giving the Fusion a makeover. The new "eco-boost" engines for the Explorer and Edge are also slated.
On car lots, Ford's inventory is under control versus high dealer inventory for GM. Ford's dealer inventory is 36 days, versus 68 days for GM.
While Japan automakers will recover some of the lost market share from Ford, the company's own sales numbers are expected to continue to grow.
A question expected to be answered over time will be what the company will do with its rising cash hoard, which could hit $10 billion in early 2012. Investors may seek a special dividend or stock buyback. While the CFO told Barron's the company will "review all options" for the cash, he was overheard at a recent analyst meeting whispering "over my dead body".
Ford looks poised to rise, Barron's claims. A special dividend or a buyback could make this turbocharged machine "fully loaded".
Share of Ford are up 3.1 percent to $12.59 in pre-open action.
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