Why Is Ford's Stock So Cheap?

The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Brendan Byrnes and technology and media editor/analyst Andrew Tonner discuss topics across the investing world.

In today's edition, Brendan and Andrew discuss one of the questions baffling a lot of investors: Why is Ford's stock so cheap? Brendan goes through some of the possible reasons one by one, and gives his opinion as to whether they are legitimate or not. Some of them include: Ford's $15.4 billion in pension obligations; loss-making European operations; its (until lately) slow push into high-growth markets like China; and its overall cyclicality. Find out if any of these reasons carry water, and whether there are legitimate reasons for Ford trading below seven times forward earnings.

With Ford on pace to lose $500 million-$600 million in Europe this year, many investors may be nervous about investing in companies that are even more internationally focused, but they shouldn't be. Emerging markets are giving new life to established American companies with deep pockets. As these industry titans look abroad for more sales, they aren't starting with a blank slate -- they're bringing their operational excellence to new markets and thriving. To uncover these picks today, we invite you to read a copy of our free report: "3 American Companies Set to Dominate the World." The report won't be available forever, so we invite you to enjoy a free copy today. Click here to get your copy today!

Andrew Tonner has no positions in the stocks mentioned above. Brendan Byrnes owns shares of Ford. The Motley Fool owns shares of Ford. Motley Fool newsletter services recommend Ford, General Motors Company, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (14)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 04, 2012, at 1:54 PM, RoniBrazil wrote:

    OK, I agree, but what about the Koreans? Hyundai and Kia? They have sleek models at low prices.

    And growing marketshare.

    If they were listed on the NYSE, I would probably buy their shares also, along with Ford.

  • Report this Comment On June 26, 2012, at 7:20 PM, JustMee01 wrote:

    @Roni

    Hyundai does trade on US markets. They have depository shares that trade OTC on the Nasdaq, symbol HYMLF:

    http://finance.yahoo.com/q?s=HYMLF&ql=1

  • Report this Comment On June 28, 2012, at 9:45 PM, banikp wrote:

    This topic is being discussed to some degree on Seeking Alpha, but it has degenerated into F vs. GM debate at times.

    Disclosure: I'm long on F.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1879664, ~/Articles/ArticleHandler.aspx, 12/19/2014 8:15:12 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement