What Ford Investors Need to Be Watching

Ford has been a longtime pick of Motley Fool superinvestor David Gardner, and has soared 48.89% since he recommended it in November 2009. David specializes in identifying game-changing companies like this long before others are keen to their disruptive potential, and he helps like-minded investors profit while Wall Street catches up. I invite you to learn more about how he picks his winners with a free, personal tour of his flagship service: Supernova. Inside, you'll discover the science behind his market-trouncing returns. Just click here now for instant access.

Andrew: Hey Fools, Andrew Tonner here. I'm joined today by Brendan Byrnes, our Industrials Analyst for

Brendan, let's take a look at a personal holding, and one of the most popular industrial stocks in all of Fooldom, Ford. It's a company that had a huge run-up at the end of 2012, but looking at 2013 and even beyond that, what are some of the biggest threats that you see facing this company?

Brendan: As you mentioned, a huge run-up. At the end of July below $9 a share, up about 50% since then, so definitely a huge run-up, especially for a big company, a cyclical company like Ford, that's not usually prone to those huge swings, so definitely good news there for investors.

What are some things you have to watch? I think in the near term it's Europe. Ford on track to lose $1.5 billion there this year alone, another $1.5 billion likely, they forecast, next year. That 2012 number was revised up twice, so you have to keep that in mind when you're looking at it going forward.

But they do have an ambitious plan, going forward. Al Mulally laid out his plan in 2013 for Europe and beyond. For Europe, 15 new models coming out. They're closing three plants; we know their capacity was below the major auto makers in Europe, so they had to do something about that. Closing those plants will help. A new marketing campaign as well.

In the next near-ish term -- next one-two-three years -- keep an eye on Europe as Ford tries to return to profitability over that time period. We'll see if they can do it. Longer term, I think you have to keep an eye on its product line and its competitors, mostly.

We know this is a product-driven business. If Ford starts lagging on its products and its product offering, the quality of its vehicles, its competitors will come in and steal market share from it. Toyota, Honda remain strong in quality. GM has had a hit-or-miss product lineup recently, but they're improving.

As they get these products out of bankruptcy... Their product pipeline basically stopped when they were in bankruptcy, so now as they retool even more going into 2013, big pickup line coming out as well for GM that will be key as they battle forward with the high-selling F-Series pickup.

It remains a product-driven business. You have to keep an eye on the quality of its products, or else customers will start abandoning, Ford will have to incentivize sales big time, offer big incentives, and that decreases margin.

Doing well right now, Ford. I'm a shareholder, I still like this company, but those are two big things; one more near-term, and the other that you're going to have to continue to watch long-term for Ford.

Andrew: Yeah, definitely things that I look at as risks when I look at the stock as well. Brendan, thank you for your insight. Thanks for watching, folks, and we'll see you at

Read/Post Comments (0) | Recommend This Article (3)

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.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

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: 2189137, ~/Articles/ArticleHandler.aspx, 9/24/2016 10:11:57 PM

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...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:01 PM
F $12.17 Down -0.01 -0.08%
Ford CAPS Rating: ****
GM $32.12 Down -0.27 -0.83%
General Motors CAPS Rating: ***
HMC $29.49 Down -0.70 -2.32%
Honda Motor CAPS Rating: ****
TM $117.66 Down -3.14 -2.60%
Toyota Motor CAPS Rating: ***