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What's Taking the Ford Turnaround So Long?

By Motley Fool Staff - Updated Apr 19, 2019 at 7:25PM

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Listener Ted wants to know why his shares keep sinking.

Check out the latest Ford earnings call transcript.

Among U.S. automakers, Ford (F 1.94%) was the one that managed to sail through the Great Recession without a government bailout. It's making muscular moves in the electric-car space, and it has plenty of cash on the balance sheet. Yet its stock is rolling downhill as if somebody left the parking brake off.

In this segment of the Motley Fool Money podcast, host Chris Hill and senior analysts Andy Cross, and Ron Gross lay out the reasons the automaker has yet to get its recovery in gear.

A full transcript follows the video.

This video was recorded on Jan. 11, 2019.

Chris Hill: Question from Ted Sloan in Lawrenceburg, Kentucky. "I'd love to hear your analysis of Ford Motor. I keep hearing about how they're implementing a turnaround strategy and getting a jump on the electric car boom and sitting on a pile of cash. And yet their share price cratered in 2018 and I have followed it all the way down." Andy, a year ago, shares of Ford Motor were closing in on $14 a share. By the end of 2018, it was below $8.

Andy Cross: Unfortunately, the turnaround is still in the works. It's not over as Ford continues to announce these billion-dollar initiatives, whether it's electric cars or cost-cutting, which has been the big initiative of Jim Hackett as he's come on board as CEO. They announced a continued trying to restructure the European operations, which have really struggled. Unfortunately, the stock has reacted to that news. You could look at it as a potential value play here. I think it's much less about the future with Ford. At these levels, I'd probably not be looking to buy the stock today.

Ron Gross: More than a decade ago, I recognized it as a potential value play. I can commiserate with the question. It's been tough. I abandoned it years ago. I think it's just going to flounder.

Andy Cross has no position in any of the stocks mentioned. Chris Hill has no position in any of the stocks mentioned. Ron Gross has no position in any of the stocks mentioned. The Motley Fool recommends Ford. The Motley Fool has a disclosure policy.

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