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Better Buy: Ford vs. General Motors

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November 17, 2012 | Comments (2)

Many investors are aware that the domestic automakers are startlingly cheap today, but the real question is, which one is a better buy for your money?

General Motors looks cheaper by a hair, but Ford doesn't have the same overhang of government ownership as GM, and its management has demonstrated a high level of competence in navigating rough waters. 

As a shareholder of both companies, Austin says in the following video that he thinks both are a buy, but that General Motors may be a better place for new money today.

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Austin Smith owns shares of General Motors, AIG, and Ford. The Motley Fool owns shares of AIG and Ford and has options on AIG. Motley Fool newsletter services recommend AIG, Ford, and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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 (2) | Recommend This Article (3)

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  • Report this Comment On November 17, 2012, at 12:52 PM, Smalls62 wrote:

    Look at price to TANGIBLE book value. Ford has virtually zero intangible assets on their books vs. GM is almost entirely. Ford making heavy contributions to pension funds while GM flounders. Check free cash flows. Check Ford's growth plans for Ford by 2015. First major state of the art plant came into full production in June pumping out an all new Focus (vs. classic) Ford sales up 32% YOY for July, 39% YOY for August, 35% YOY for Sept, 48% for October. China/Japan spat to be credited for some of October jump. How's GM doing? How about the massive days of inventory on hand vs. Ford's inventory supply. GM has highest since 2008. Nothing has changed at GM with overproduction of vehicles and covering the hood with incentives to move the product. The only thing which has changed at GM is they were relieved of huge legacy liabilities by having bankruptcy laws broken.

    Don't forget Ford is also leading the way in Euro streamlining through plant closings while Opel (GM's unit) unions indicate all is clear. GM sitting on its hands. Opel hands tied for a couple more YEARS by unions. Lastly, check the China growth initiative in depth. Ford is doubling their dealership network by 2015, currently building 5 more manufacturing plants to supply the 15 new models to be introduced by 2015. Ford going full throttle in a couple years in the largest auto market in which they currently hold only a 2% market share. GM is going to lose market share in China.

    Ford within the last 12 months placed an emphasis on overhauling its Lincoln lineup now that Ford branded has great cars in all classes. Not a coincedence Ford recently announced they will introduce the Lincoln lineup in China in 2014. CHINA, now the world's largest auto market. Ford is on its way.

  • Report this Comment On November 17, 2012, at 1:07 PM, Smalls62 wrote:

    GM is still a buy but far from being better than Ford. Ford, China, Growth, Investment Grade, Funding Pension, Stable Cash, Leading European restructure automaker. There is more but I've said enough.

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