When to buy Ford?

[Cortina]

I’m curious whether you owned a Ford Cortina at one time?

https://en.m.wikipedia.org/wiki/Ford_Cortina

Yes ... three from memory . 2 of them used in competition (closed road stage rallying ! (1962 / 1965 manufacture)) ... not sure it is relevant to share trading ... but now you know !!

 

[Pilot2013]

Bought F back in 2008 timeframe around $2-$3, sold at $8, wish I had kept it.

Have owned numerous Fords over the years, still have an Explorer Sport Trac with over 150k miles, gas, tires, oil and brakes has been it.

Oh, and this...

I kind of like Fords. Not buying the stock right now though.

 

[kcowan]

I do not tend to buy the stock of products that I own. The one exception is AAPL but that one was bought before we had any of their products and it was stimulated by us being users of MS whose stock we do not own.

(We own an Explorer and an Escape.)

 

[LiveBelowMeans]

The fact that Ford did not declare bankruptcy has actually hurt them. The system rewarded GM and Chrysler by eliminating their debt, allowing them to invest in their businesses. Take a look at Fords debt level. It’s massive. Their stock is going no where fast. Jmho

 

[copyright1997reloaded]

The fact that Ford did not declare bankruptcy has actually hurt them. The system rewarded GM and Chrysler by eliminating their debt, allowing them to invest in their businesses. Take a look at Fords debt level. It’s massive. Their stock is going no where fast. Jmho

Well, I made a nice profit on F debt. Bought some 7.5% notes par value 25 at around $5 during the financial crisis. I did this instead of the common as it was higher on the bankruptcy pecking order and I figured Ford had a non-zero chance of getting there (Bankrupt). Got paid at a 35% annual rate (7.5*25/5) for a few years until Ford called at $25 (so I made 5x on my investment plus the outrageous interest payments).

I had people at the time asking about buying GM stock - and I told them a) No way and B) if they wanted to play the auto makers the only sane way was to buy the debt. Even with that, I wouldn't touch GM as I figured they and Chrysler were weaker players and their bankruptcy would benefit F. [Editorial note, the GM Bondholders got hosed during GM's bankruptcy, upsetting 150 years of Bankruptcy case law.]

 

[LiveBelowMeans]

Well, I made a nice profit on F debt. Bought some 7.5% notes par value 25 at around $5 during the financial crisis. I did this instead of the common as it was higher on the bankruptcy pecking order and I figured Ford had a non-zero chance of getting there (Bankrupt). Got paid at a 35% annual rate (7.5*25/5) for a few years until Ford called at $25 (so I made 5x on my investment plus the outrageous interest payments).

I had people at the time asking about buying GM stock - and I told them a) No way and B) if they wanted to play the auto makers the only sane way was to buy the debt. Even with that, I wouldn't touch GM as I figured they and Chrysler were weaker players and their bankruptcy would benefit F. [Editorial note, the GM Bondholders got hosed during GM's bankruptcy, upsetting 150 years of Bankruptcy case law.]

Nice trade. Obviously not the same going forward.

 

[copyright1997reloaded]

Nice trade. Obviously not the same going forward.

No, those were the days. It's funny, at the time, it sure didn't seem like it was the days (to be investing) with the world supposedly coming to an end.

Also I am timid in these kinds of investments, really doing fairly small bets, particularly when it comes to things with a lot of risk. Obviously a debt security trading at 20-30% of par has risk associated with it.

 

[Milton]

I have had several Ford vehicles over the last few years ... My experiences have been better than very good - a few bad stories from my buddies but in general about the same as GM, etc. And, to be clear - WAAAAY better than what my MB and BMW friends say about their reliability issues.

That's a pretty low benchmark (surprised you didn't include a comparison to Lada and Yugo!).

Do you have any experience with Japanese autos?

 

[bobandsherry]

A week of upside in the market and this pig lags the S&P by about 50%. S&P up 1.21% today and F up by a whopping 0.19%. Speaks volumes on the lack of interest in F.

Just wait for next quarter when management stands up and lowers guidance yet again, maybe $8 will be buying opportunity. As an investment this has limited upside, so one should only buy if happy with dividend, but don't expect preservation of your investment.

 

[Freedom56]

Normally you buy auto stocks at the bottom of a cycle not when it's coming off the peak of the cycle. 2018 is forecast to be a down year and 2019 even lower. Remember stocks trade on future earnings not past earnings.

 

[bobandsherry]

Normally you buy auto stocks at the bottom of a cycle not when it's coming off the peak of the cycle. 2018 is forecast to be a down year and 2019 even lower. Remember stocks trade on future earnings not past earnings.

GM, FCUA and F all are in same "cycle". F is down 20% from it's 52 week high while GM and FCUA are down 11% and 10% respectively. Looking at it from the low's for GM, FCUA and F the results are +31%, +133% and +6% respectively. So while I agree with you on buying at bottom F is the big laggard in whatever cycle is occurring now.

Knowing when you are at the top or bottom of a cycle is only after the top or bottom has occurred, similar to being Monday morning quarterback.

 

[Freedom56]

GM, FCUA and F all are in same "cycle". F is down 20% from it's 52 week high while GM and FCUA are down 11% and 10% respectively. Looking at it from the low's for GM, FCUA and F the results are +31%, +133% and +6% respectively. So while I agree with you on buying at bottom F is the big laggard in whatever cycle is occurring now.

Knowing when you are at the top or bottom of a cycle is only after the top or bottom has occurred, similar to being Monday morning quarterback.

I look at the earnings forecasts to determine up/down cycles. Another good source is just read industry publications such as:

Automotive News

 

[bobandsherry]

Ford North America President Raj Nair to step down due to 'inappropriate behavior'

Oh wow, yet even more good news from Ford (SMH), he was President for all of 8 months. What a great job Hackett and other Ford management did with their selection to fill Field's seat. In the 8 months Nair found free time for "inappropriate behavior", maybe if he concentrated on improving the business Ford would have done better than 5% drop during his tenure as NA President, significantly below every other Peer in the industry. In same time GM was up nearly 20%, Volkswagen and Honda up 30%. Heck, even Nissan kicked it up 10%.

Inappropriate behavior is how he and Hackett have screwed the Ford shareholders with sub-par stock performance.

 

[Cortina]

Looking a bit better today ... what a difference an upgrade seems to make ?

 

[NYEXPAT]

Looking a bit better today ... what a difference an upgrade seems to make ?

Ford owner here. One thing I have noticed is that when people talk about div yield, they do not account for the special div.

 

[Blueskies123]

10-15 years is a lifetime - in that time we'll all be in flying cars. Just as much of a chance of that happening as seeing self driving cars. Do you honestly see self driving cars replacing people's personal vehicles? No way. .

So you do know that you can buy a flying car right now, right?

https://www.dezeen.com/2018/03/13/worlds-first-commercial-flying-car-unveiled-at-geneva-motor-show/

https://www.cnbc.com/video/2018/03/07/you-can-now-buy-the-worlds-first-flying-car.html

You might want to reconsider your bet that you will not see self driving cars.

 

[bobandsherry]

So you do know that you can buy a flying car right now, right?

You might want to reconsider your bet that you will not see self driving cars.

Um, well i said:

10-15 years is a lifetime - in that time we'll all be in flying cars.

So, not sure what point you were trying to make or what bet I need to reconsider.

 

[SpinDr]

Short term I would not venture a guess about the Ford stock price. But as has been mentioned previously, the advent of self driving cars will fundamentally change the industry. They are on the way.

Think about the family with Mom and Dad working and teens driving to all sorts of locations such as school, events, weekend parties etc.. The current challenge is either a lot of shuttling around, or commonly, 2-3 cars being shared in a larger family.

A single self driving car could take the kids to school, come home and take mom or dad to work, head back in the afternoon to pick up a kid or two, head back out later to pick up mom and dad. If a hybrid or electric, even gas not a big issue. This could significantly reduce demand for multiple cars in a family.

 

[Jerry1]

Short term I would not venture a guess about the Ford stock price. But as has been mentioned previously, the advent of self driving cars will fundamentally change the industry. They are on the way.

Think about the family with Mom and Dad working and teens driving to all sorts of locations such as school, events, weekend parties etc.. The current challenge is either a lot of shuttling around, or commonly, 2-3 cars being shared in a larger family.

A single self driving car could take the kids to school, come home and take mom or dad to work, head back in the afternoon to pick up a kid or two, head back out later to pick up mom and dad. If a hybrid or electric, even gas not a big issue. This could significantly reduce demand for multiple cars in a family.

The other thing I heard about the other day was subscription service. You need a car? You go pick one up. You need a commuter car, you take that. You need a pickup for the week, you take that. You need a sedan, you take that. Basically, a range of vehicles for a monthly "lease" fee. Not sure how that would price out, but as you said, the industry is changing.

OTOH, I'm not sure if the change will result in less cars sold (year to year) versus less cars than what otherwise would have been sold. There is still growth in our population. Also, a little off topic, but the change may increase other parts of the industry. High utilization of vehicles may require more maintenance and (back on topic), they may burn out quicker - needing more replacements.

Seems like there will always be opportunities in transportation. I'm really looking forward to the transporter. To just show up in the new location would be amazing. I might even start traveling if that ever comes to be.

 

[jmp470]

I know you are talking about the stock, but, I went to look at their 2018 Expedition. While, it was a decent vehicle, it is not a $72,000 vehicle in my opinion. I know people are buying vehicles for that or more, but, Ford does not have the image to pull that off.

They are charging for active cruise control, lane assist, ect. This technology is common and is being offered by Toyota for free.

Because of that, I've avoided their stock.

 

[bobandsherry]

Ford owner here. One thing I have noticed is that when people talk about div yield, they do not account for the special div.

The real measure of a stock isn't just looking at the dividend yield, even with special dividend. The real measure of a stock is the return, growth with dividends. Based on that, over the last 3 years (in a relatively hot market) a $10,000 investment in Ford would be worth $7,911 today (with dividend reinvestment). That's a negative return of 7.5% annually. Comparatively, GM +3.6%

I even looked at return over 8 years, with dividends all reinvested over that time the stock return would have been $90 total, yep, $90 return for the 8 year period or a whopping annual return of 0.11%. Thank god for the "special dividend" or my return would have been negative. Once again, comparatively GM was 3.57% annual return.

 

[NYEXPAT]

I heard the 100k "navigator" is flying off the lots and Ford can not meet demand. Have also heard that they can't give away the continental.

 

[NYEXPAT]

The real measure of a stock isn't just looking at the dividend yield, even with special dividend. The real measure of a stock is the return, growth with dividends. Based on that, over the last 3 years (in a relatively hot market) a $10,000 investment in Ford would be worth $7,911 today (with dividend reinvestment). That's a negative return of 7.5% annually. Comparatively, GM +3.6%

I even looked at return over 8 years, with dividends all reinvested over that time the stock return would have been $90 total, yep, $90 return for the 8 year period or a whopping annual return of 0.11%. Thank god for the "special dividend" or my return would have been negative. Once again, comparatively GM was 3.57% annual return.

I understand, but was specifically referring to the dividend yield only!. My cost is a shade under $11.00 now and in three years time I would expect the stock to be at $15.00, but would not care if it stayed at 11 as long as they pay the dividend and hopefully the special dividend as well.

 

[bobandsherry]

I heard the 100k "navigator" is flying off the lots and Ford can not meet demand. Have also heard that they can't give away the continental.

I don't know if "flying" is the right term for roughly 1,200 units a month sold, but def appears to be exceeding expectations.

Customer response to the all-new, 2018 Lincoln Navigator has been overwhelmingly positive. According to Ford, newly-shipped examples of the premium SUV spend an average of just seven days on the lot before being sold, and many customers are trading in Land Rover and Mercedes SUVs to get them. Transaction prices in January, 2018 were up by about $21k versus the same month last year, as nearly 85 percent of all 2018 Lincoln Navigator buyers have opted for the high-spec Reserve or Black Label trim levels.

Source: Navigator, Ford Expedition Production

 

[target2019]

I understand, but was specifically referring to the dividend yield only!. My cost is a shade under $11.00 now and in three years time I would expect the stock to be at $15.00, but would not care if it stayed at 11 as long as they pay the dividend and hopefully the special dividend as well.

For ten years, F trades between 10 and 17.
We bought 200 shares today at $11.
Expect no earnings growth for a few years. Hope they keep the dividend!