With Chrysler out of the way (and soon GM), Ford is going to surge and dominate. 100% up room to go...
ford has been in a downtrend for the past 2 years and you just went long at these highs?....why?, wait for a retrace. Mistake imo, but we will see.
On a fundamentals basis, Ford has a P/E of around, oh, I don't know... negative 80 maybe? I won't even get into book valuation, P/S ratio, EBIDTA, quick ratio, etc., etc., etc. If you are daytrading this, maybe you can eek out some money, I guess, even though it's near a long term high at a time when there has not been any improvement in the auto sector in terms of unit sales, profits, etc. The best Ford can say is they've slowed their cash burn, but I am skeptical, deeply skeptical, as to how long they'll be able to repeat this phrase, and even if they can, they're still losing their cash cushion that is the only thing keeping them alive. Unless you believe the global economic fundamentals will be much better in a year or two than they are now, this is a horrible investment. I'm expecting things to get much worse, as the spending/saving/consumption patterns still have not caught up to the still rising unemployment, debt defaults, intensely changing consumer behavior patterns, etc. And then there's the issue of relative strength; Ford won't necessarily pick up that many sales from Chrysler with some 28 other automakers operating in the U.S. (and another two on the way; Alfa Romeo and Fiat). But who knows.
How is Ford going to match the resources of the Obama admin? GM may produce crap, but now they have nearly unlimited gov resources.
You know what always amazes about naysayers is that they don't know when to quit. They are just as bad as those bulls that don't know when to quit. >I'm expecting things to get much worse, as the spending/saving/consumption patterns still have not caught up to the still rising unemployment, debt defaults, intensely changing consumer behavior patterns, etc. First full disclosure, I am long Ford at 1.92. Next Ford is not just riding on a cushion. Think about the entire context. When the Ford CEO came into power the first thing he did was raise cash. Everybody was surprised, and what it shows is that this CEO knows his stuff. You see this CEO manage to right the ship called Boeing, hence he has some understanding of how to run big companies. Ford is taking market share and that is a good thing. Will this economy drop? Sure it will drop and if you believe it then you better get ready for soup lines, and the likes. This is actually what gets me the most with naysayers. They talk the talk, but when it comes to their personal situation the answer is, "oh I will be ok..." Really? I rather doubt it... If this thing goes down we all go down and there is no amount of preparation that you can make that will allow you to save yourself.
I believe Ford is probably the strongest US auto maker. The worse Chrysler and GM do the brighter the future looks for Ford. I think Ford is a strong stock, for the auto sector at least. However, why would you want to get long on F right now? The timing is terrible imo. Buying F after it just went up almost 400% in less than three months just sounds like you missed the boat, sounds like your behind the herd, for now. I think F is due for a fair retracement and after it begins hitting resistance in the 3$ range I think F would be a very solid buy.
Two small points: Ford has not 'raised' any net cash levels. The only thing they've managed to do is slow the bleeding, cash-burn levels. If I was spending $8,000 more per month than I was earning, and I now am spending $4,500 more per month than I am not earning, and I'm millions in debt, am I in a strong cash position and a good credit risk? That's on an individual basis, and with Ford, it's even worse, as the one major issue they can't control is that their market cap is not withing their control and is incredibly volatile now, as their share price is on a roller coaster ride, and that market cap deeply influences their very ability to control cash burn rates and to raise capital. Second, Mulally did a good job with Boeing in terms of product development, but look at what happened very soon after he left. Boeing is deeply in debt, their balance sheet is awful in other respects, and they're not exactly the world's best turnaround story if you're trying to conflate Mulally's abilities. His timing in leaving Boeing may have been brilliant, but many of the problems @ Boeing now are artifacts of his tenure there.