3 Reasons to Sell Ford

The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Brendan Byrnes and consumer goods editor/analyst Austin Smith discuss topics across the investing world.

In today's edition, Brendan and Austin take a look at reasons that one might want to sell automaker Ford. If the situation in Europe were to get substantially worse, it could drag on Ford's bottom line even more. Ford is expecting to lose $500 million to $600 million in Europe this year, and a worsening situation there could exacerbate that. Another possible problem for Ford could be China, which the company is relying on for a big percentage of its future growth. If Ford doesn't make cars that are embraced by Chinese consumers, it could have trouble hitting its ambitious growth goals. Finally, Ford doesn't have to worry about a big union negotiation until 2015, but that's still a potential risk for the company going forward. Check out the video below for more on possible trouble signs for Ford.

Despite these reasons to potentially sell Ford, the company is incredibly cheap and looks like a solid long-term outperformer. But we've come across a different stock outside the manufacturing sector that has us so excited we can hardly contain our investing enthusiasm. This pick has so much promise that we've dubbed it "The Motley Fool's Top Stock for 2012." The report highlights a company that is revolutionizing commerce in Latin America, and you can get instant access to the name of this company by clicking here to download it now.

Austin Smith has no positions in the stocks mentioned above. Brendan Byrnes owns shares of Ford. The Motley Fool owns shares of Ford and Tesla Motors. Motley Fool newsletter services recommend Ford, General Motors, 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 31, 2012, at 7:56 PM, mistacy wrote:

    Ford's share price is at a discount right now. Europe is priced in. Asian market is still too new for Ford to say where it is standing among its competitors. Why don't you mention Russia & India where Ford has decent growth? Ford just got its contract settled with its union, so much can happen between now & the next round of negotiations. 4 years from now. That is irrelevant for its current share price. The bears might be able to squeeze another $1 drop out of it, but even that much I doubt. Ford is positioned for a beautiful ascension to where it should be, above GM's share price. It might take a couple years to get there. A 100% profit on investment in a couple years is a pretty good deal. My biggest question & issue with this article is why would anyone title it that way (besides going against the grain & sensationalism) when its author acknowledges that "Ford, the company is incredibly cheap and looks like a solid long-term outperformer"? Makes very little sense.

  • Report this Comment On June 01, 2012, at 5:50 PM, mardoche56 wrote:

    I am confused. I already have F and GM. should I buy more and hope to recoup my money plus or sell and take a loss?

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