Most readers are probably familiar with Ford Motor Company (F -0.48%). It has long been a pillar of American industrial success. The business was founded more than a century ago. But the stock hasn't been a winner for shareholders. It's up just 16% in the last five years. During the same time, the S&P 500 index grew 69%.

So, is this top Detroit automaker's stock a buy, sell, or hold for your portfolio?

Business updates

The top news that has impacted Ford in recent times was the autoworkers' strike, which shut down production at some factories for six weeks. To the relief of the industry and shareholders, a deal on a new employment contract was reached. However, it was not without major disruptions.

"The strike had an EBIT (earnings before interest and taxes) impact of roughly $100 million, and so far, the strike has trimmed about 80,000 units from our plant," CFO John Lawler said on the third-quarter 2023 earnings call. He added, "This would reduce 2023 EBIT by roughly $1.3 billion."

Ford also initially pulled back its guidance for the full year, only to bring it back. Management expects adjusted operating income to come in between $10 billion and $10.5 billion in 2023, down from a prior forecast of $11.5 billion (at the midpoint). Even more noteworthy, the autoworkers' strike will end up costing Ford nearly $9 billion in additional employee costs over the roughly four years of the new contract.

Investors should also be focused on Ford's ambitions as they relate to electric vehicles (EVs). While the legacy segments continue to post healthy operating profits, the EV division, known as Ford model e, is struggling. The segment reported a cumulative operating loss of $3.1 billion through the first nine months of 2023. This was despite unit volume and revenue for the division rising 23% and 16%, respectively, during the same period.

Weaker demand for EVs, as well as increasing costs for materials, led management to push out $12 billion it had planned to spend on EV-related investments and capital expenditures. This includes delaying the construction of a battery plant in Kentucky.

This company has been facing some immense challenges this year.

The case to buy and/or hold Ford stock

Ford has undoubtedly been dealing with some issues, but I can see why some investors might be inclined to buy the stock right now. For starters, shares are cheap today. They trade at a price-to-earnings ratio of 7.1, which is a huge discount to the trailing three-year average. This adds potential upside. Moreover, the current dividend yield is a healthy 5.6%. Income-seeking investors might be intrigued by this.

For existing Ford shareholders, the reasons to hold are the same as the reasons to buy the stock.

The case to sell Ford stock

This is a business that won't be making it into my portfolio anytime soon. As an investor who wants to own a stock for at least the next five years, I view Ford as a no-brainer sell because the company doesn't have an economic moat protecting its competitive position. Some might say that brand recognition or large manufacturing capabilities are key attributes that will support its position. But I disagree.

Ford doesn't even crack the top five global automakers in terms of unit volume. So, there are bigger industry peers that are more recognizable on a worldwide basis. Plus, the fact that they sell more units helps them benefit more than Ford in terms of driving economies of scale. The intensely competitive nature of the auto industry is just something I'd like to avoid.

I also don't want to own a cyclical business. Ford's sales and earnings might increase at respectable rates in favorable economic times. But when there's a recession, things could get ugly.

I'm not smart enough to predict when the macro picture is going to take a turn for the better or worse, which makes successfully timing a purchase of Ford shares almost impossible.

I'm fine with passing on the stock.