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.

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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.

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  • 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:


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

  • 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.

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