Where Is Ford Motor Company Heading Today?

In this edition of The Motley Fool's "Ask a Fool" series, Motley Fool analysts Jason Moser and Brendan Mathews take a question from a reader who asks, "What is Ford (NYSE: F  ) going to do? I bought at $16 and sold at $15. Some say it will drop to $12; others predict $17-$18 this year. What do you think?"

Jason and Brendan both think that Ford is a good business with a reputable brand and great leadership today in CEO Alan Mulally and COO Mark Fields. However, Jason believes the best time to invest in Ford was back during the bailout crisis, when uncertainty was so high. Automakers in general operate in a very capital-intensive industry, which can make profitability difficult at times due to the cyclical nature of the auto industry. Regardless, it is best for investors to focus on the long term and not worry about short-term movements in the stock price. As long as the investment thesis is still sound, it's best to focus more on how the business is operating, and less on what the stock price is doing.

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  • Report this Comment On April 07, 2014, at 3:13 PM, speedbirdd wrote:

    your understanding of Ford and their business is flawed. auto's are a growth business on a global scale. Asia Pacific is growing Ford sales were up 60% last yr in 2014 ford will sell 1.2m units headed to 3m units in the years to come. the North America market is expected to grow almost 1 million units this yr. and Europe where F was losing 1.6b a yr is about to hit breakeven this yr. all that being said coupled with streamlined manufacturing Ford is set to grow bottom line earnings at a substantial rate. Breaking it down profit as follows for 2015

    North America 9B

    Europe .5b

    South America .5b

    Chian 1.5b

    India .5b

    Balance of the globe break even

    total profits 11-12B up from 8b in 2014. or about 3.per share with a 10-12 PE is a 30-36 stock price. One more point auto's in the US are getting very old and trucks even older and as the recovery in housing and oil development gains strength autos will do great. Just look at Autonation as a proof point. it is true high capitol intense business but point to one business that is not. Do you think drugs are cheap or computer chips or cloud computing it is all expensive. Ford is headed higher

  • Report this Comment On April 07, 2014, at 3:44 PM, speedbirdd wrote:

    you do not do your readers justice and can do harm with these flawed facts. I realize you cover lots of companies and to have an in depth understanding of each is not possible but you need to have a basic understanding of the core business or you risk advice so flawed that it causes small investors to make decisions based on that advice. Your explanation of Ford and the auto business is from a general perspective and not a specific view for example autos are capitol intense, not a growth market and so on. reality check 8 out 10 americans have a car but in China 1 in 10 have a car ( plenty of room for growth there) that is why global auto makers are building plants at a record pace this includes Mercedes, Audi, BMW, VW GM and so on. 1.5b people earning enough to buy a car will buy one asap and that is a growing and profitable market for the industry including Ford. your no growth is what got me. i could write for ever but I think i made my point. PS India same potenetial

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Jason Moser

Jason A. Moser is an analyst for Motley Fool One. He finds stocks that make money and tells the world about them. He's also won a Buzzy. And an Awessie.

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