Tesla Motors Inc. and Ford Motor Company Hit Today's Headlines

Tesla Motors is spending $100 million to upgrade its California plant, while an analyst reaffirmed Ford stock as a buy.

Jul 22, 2014 at 3:00PM

The Dow Jones Industrial Average (DJINDICES:^DJI) was trading 60 points higher, or 0.35%, by midafternoon as investors brushed aside worries surrounding Russia and Gaza and focused instead on economic data and earnings reports. One positive economic takeaway for investors was that sales of existing homes rose 2.6% to a seasonally adjusted annual rate of 5.04 million last month, according to the National Association of Realtors. Data showed an increase in first-time buyers and sales increasing across all four regions in the U.S. market, which are good signs that the housing market is gaining momentum again.

With that in mind, here are a couple industrial companies making headlines today.

Outside the Dow, Tesla Motors (NASDAQ:TSLA) announced it has halted production at its California assembly plant for two week to install additional robots that will enable the electric-auto maker to accelerate production of its Model S. Tesla hopes the $100 million upgrade will boost production by 25%.

Company spokesman Simon Sproule told Reuters, "This represents the single biggest investment in the plant since we really started operations and enables us for higher volumes. It gets us ready to build X and to do it on the same line as the S."


Source: Tesla Motors.

The development, while costly, represents two positives for Tesla investors. First, as the automaker was producing roughly 700 Model S units per week at the end of the first quarter, it needed to increase that rapidly to hit its goal of producing 1,000 units per week by the end of 2014. Second, it's a solid sign that production of the Model X won't be pushed back any further.

As Tesla's second-quarter letter to shareholder approaches, investors hope the automaker met its goal of producing between 8,500 to 9,000 Model S vehicles during the three-month period, with delivery of 7,500.

In other automotive news, Citigroup on Tuesday reaffirmed its buy rating on Ford (NYSE:F) stock. The bank placed a $21 price target on Ford's stock, which is up from Citigroup's previous $19 target. Ford's stock price has recovered from a sell-off early this year, when some investors headed to the door after hearing the automaker would be less profitable due to rising costs associated with the launch of 16 new vehicles in the United States.

Despite the lower than desired profitability, it'll still be a strong year for America's second-largest automaker. Furthermore, the vehicle launches will help spur demand, as Ford's North American vehicle sales fell roughly 1% in the second quarter from the same period of 2013.

One thing for investors to look for during Ford's second-quarter presentation on Thursday will be its North American operating margin. It's no secret that North America drives the vast majority of Ford's profits; if its operating margin takes a hit, the effects will be felt on the bottom-line earnings. In the last quarter, Ford's North American operating margin checked in at 7.3%, and investors would like to see that figure rebound to between 8% and 9% for the second quarter. 

What technological shift is Ford calling "fantastic"?
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to ride this megatrend. Click here to access our exclusive report on this stock.

Daniel Miller owns shares of Ford. The Motley Fool recommends Ford and Tesla Motors. The Motley Fool owns shares of Ford 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

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