Is Ford’s Stock Still A Good Buy?

up 31.27% while the S&P 500 is up 37.58%.

At $11.25, Ford is trading $.75 higher than its 50-day SMA of $10.50. It’s trading $1.29 higher than its 100-day SMA of $9.96. And it’s trading $.56 higher than its 200-day SMA of $10.69. Looking at Ford from a short-term standpoint, the stock is showing strength.

E = Earnings Have Been Impressive  

While revenue hasn’t improved much over the past five years, earnings have improved by a substantial margin.

      2007       2008       2009       2010       2011
Revenue ($)in billions

170.57

143.58

116.28

128.95

136.26

Diluted EPS ($)

-1.41

-6.50

.86

1.66

4.94

 

Quarterly revenue and earnings have been steady.

     9/2011      12/2011      3/2012      6/2012      9/2012
Revenue ($)in billions

33.05

34.58

32.44

33.21

32.17

Diluted EPS ($)

.41

3.33

.35

.26

.41

 

T = Trends Do Not Completely Support the Industry

Ford’s new Chief Operating Officer, Mark Fields, recently stated that the new Ford Fiesta will offer 40 miles per gallon as well as a one-liter/three-cylinder eco-boost engine. In his words, Mark Fields states, “It will be the most fuel-efficient non-hybrid engines in the industry.” That’s the good news.

The bad news is that the North American market has been stagnant and the European market has been extremely weak. Ford has been aggressive in Asia, particularly in China and Thailand. If that bet fails, then Ford can be in for some rough times ahead.

Conclusion

Ford’s business has vastly improved over the past few years. Ford also offers a 1.80% yield. That might not blow anyone away, but it doesn’t hurt, either.

Ford almost met its demise in the early 1980s as well as in 2008. In both instances, these turned out to be great buying opportunities.

While the long-term prospects might be good, Ford is facing an uphill battle over the next few years. Due to overall economic conditions, automobile sales aren’t likely to improve.

Based on all the factors listed above, Ford is a WAIT AND SEE.

Using a solid investing framework such as this can help improve your stock-picking skills. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

More Articles About:   , , , , , ,