When to buy Ford?

[bobandsherry]

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.

Kind of reminds me what people were saying about GE in regards to their dividend only a few years ago. As you look at 5 year trend, what makes you think this would be $15 in 3 years? Based on trend I see this with a better likelihood of hitting $8 than it does $15.

 

[bobandsherry]

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!

Hope you are right, but last 5 years the stock has trended downward (see chart in message above) and that's despite a market that grew 75% in that time as well as strong economic growth and low interest rate environment. Toss in recent tax plan and even with that this stock just can't get positive traction.

Hopefully F will break their 5 year trend, but if this drops by just another $1 you'll have to collect 2 years of dividends just to break even.

 

[Winemaker]

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.

Although laws can be changed in a heartbeat, a licensed driver is still required to "operate" a motor vehicle. If a vehicle becomes disabled for whatever reason coming home from soccer practice, who/how makes decisions to get it off road? Half of the drivers now are clueless about vehicles anyhow. I can't imagine a 14yo on the side of the road making any rational decisions about anything, let alone with a broke down vehicle when she/he is late and she has to text and "selfie" everybody about their dilemma.

I read an article today about sunspot flares, and rogue EMF flares screwing with autonomous cars. Heck, one may have to get out, look under the hood and hit the reboot button.

 

[NYEXPAT]

For the record, I dumped the 10k shs. I had yesterday at a little above my adjusted cost. I will be back for the next divy though.

 

[bobandsherry]

Roll forward 6 months, Ford is still a dawg, when this thread started it was $10.80, trading at $9.31 or 14% drop. Yep, that strong dividend will only take you 2+ years to recoup the loss.

Guess it could be worse, could have GM stock and see it tank even more, from $40.75 to $33.77 today (17% drop). Or maybe Fiat with over 20% drop. The darling (cough) of auto industry Tesla down 10% as well (mainly because the CEO has shown how much leadership skills he lacks).

Current market conditions just not good for auto's. So OK, maybe Ford isn't that bad, they've beat the others in stock price performance Glad I put my small bet on Amazon instead.

 

[Montecfo]

Hard to own the autos.

 

[MikeBo]

I have a 2016 f150 ecoboost, max tow, 4wd..with 70,000 miles on it, never been in the shop. It gets 21 miles to the gallon on the highway and tows my 9,000 boat like a champ...thing is a beast.

 

[stephenson]

Dual turbos also really great at offsetting loss of power due to altitude ...

But, turbochargers also likely to need replacement in normal life and may offset any perceived fuel mileage advantage ...

I tried both the F150 and Silverado ....Florida driving so went with the big V8 (6.2) V8 ...70 mph on flats is around 23-24 mpg.

Both are nice trucks!

 

[yakers]

Last week sold CNI at a gain and F at an offsetting loss to pay off....my 2015 Ford Fusion Energi (plug in hybrid) just coming off lease. Had several good Fords, to bad they are getting out of regular car mfg (except Mustang). Their stock 'should' do better in my thinking but hey, I've been waiting, limiting bonds for a while now. Things can stay irrational longer than I can stay solvent.
I am in draw down mode, retired 10 yrs ago, so now I look at my portfolio and decide what to sell. Last week that was F.

 

[Tiger8693]

I have been catching a falling knife the last couple of days, trying to get my basis down so I can get out of this on a (hopeful) rebound. Worried now if it's going to work, may just have to take the hit. May wait for the ned ex-div date then dump.....

5k shares, $8.86 basis

 

[Cortina]

Dual turbos also really great at offsetting loss of power due to altitude ...

But, turbochargers also likely to need replacement in normal life and may offset any perceived fuel mileage advantage ...

I tried both the F150 and Silverado ....Florida driving so went with the big V8 (6.2) V8 ...70 mph on flats is around 23-24 mpg.

Both are nice trucks!

To be stricty accurate they don't have two (dual) turbochargers (I'll say per bank, since we don't have the big v6 / v8 trucks here). It's a single twin scroll turbo which has different benefits at both lower speed and higher speed spinning. (I stand to be corrected if for some reason Fords in USA are different from Europe). If things are designed and maintained correctly I would NOT be expecting to replace the turbo in normal life.

I suspect the V arrangements have a turbo on each side - but the twin scroll design makes it perform as if there are twice as many!

 

[njhowie]

I've never considered Ford for investment because of their debt situation. The dividend may very well need be reduced going forward.

The debt is a very big issue as it acts like a ball and chain restraining performance. The situation of Ford vs. GM today is very similar to American Airlines vs. the rest of the airline sector after 9/11. Most of the major carriers ran for cover of bankruptcy, cleaned up their balance sheets, and emerged stronger. American chose to take the high road, not opting bankruptcy when the ability was there. In the time that followed, because American still carried the same debt load, but was competing against all these other carriers that now had their debt loads significantly reduced, American was not able to effectively compete. The ball and chain of the debt held them down. As a result, ultimately, bankruptcy was also their destiny.

Today, Ford is in that same situation - GM took the bankruptcy, drastically reduced its debt load, and today performs better financially than Ford. Just look at the financials of the two and it's easy to see the effects. The difference in the debt loads is what is responsible.

That being said, ultimately, Ford is going to buckle and likely the only way to effectively compete against GM is going to be by also choosing bankruptcy to get the necessary financial restructuring to enable it to be more competitive. Minimally, the dividend will be cut sooner rather than later.

Tiger - stop trying to catch a falling knife with the logic that you want to be able to get out sooner having a lower average. That's throwing good money after bad. Find something else to invest in which is a stronger investment. Surely you have your eye on other potential investments, no?

 

[Tiger8693]

Tiger - stop trying to catch a falling knife with the logic that you want to be able to get out sooner having a lower average. That's throwing good money after bad. Find something else to invest in which is a stronger investment. Surely you have your eye on other potential investments, no?

I do, but after the continued dividend announcement, I jumped in hoping for a bounce from the news. I'll keep an eye on it this week and make a decision. I don't think BK is imminent. They do have ~$25B available. I also hope that trying to do the right thing vis-a-vis the previous downturn doesn't come back to bite them in the @$$. I feel it's more management issues, but either way it could be a bad ending.

 

[Freedom56]

Some info on the state of the auto industry as of June 2018. Auto and other cyclical stocks start turning up when sales forecasts are in an upward trend. Per the attached report, 2018 is a down year and so is 2019. I would look at the 2020 forecast later this year for signs of growth before jumping in to this sector. I personally avoid this sector along with retail, airlines, energy and others. The default risk on Ford's debt however is low over the next 3 years given the interest coverage from operating earnings.

 

[njhowie]

Freedom - that report is only a few months old and already the China numbers are likely off the mark.

Ford Motor Co (F.N), which has been struggling to turn around falling sales in the market, said on Friday that September sales in China were down 43 percent.

https://www.reuters.com/article/us-...7-years-as-growth-engine-stalls-idUSKCN1MM0KV

 

[Freedom56]

Freedom - that report is only a few months old and already the China numbers are likely off the mark.



https://www.reuters.com/article/us-...7-years-as-growth-engine-stalls-idUSKCN1MM0KV

Ford's problems in China have a lot do do with their product mix and competition with Chinese Auto Makers. But you are correct the China Growth forecast is already shot. As I posted in another thread, the forecast from PPG Industries is troubling especially for the auto sector. There appears to be a big disconnect between the rosy economic forecasts and what companies are saying.

In any case, I have zero exposure to equities. I just research companies and sectors for their debt offerings.

I was also trying to communicate that you want to buy a cyclical stock like Ford at the first sign of a turn-around instead of catching a falling knife.

 

[Tiger8693]

I was also trying to communicate that you want to buy a cyclical stock like Ford at the first sign of a turn-around instead of catching a falling knife.

I agree. I was already in it, and have probably dug a bigger hole with my efforts.

Will be watching closely next week.

 

[RobbieB]

My FA sold all my Ford stock back in 2014.

 

[bobandsherry]

My FA sold all my Ford stock back in 2014.

Did he unload anything else as well?

 

[target2019]

And what was the history of the F stock purchases? When bought, cost basis, etc.?

 

[Tiger8693]

My purchases were mostly recent. Cost basis is $8.86. Just hoping to minimize at this point. Won't continue to try and DCA.....

 

[bobandsherry]

In my opinion, never. This company has failed to deliver value to the shareholder for years. Any good news is offset with future bad news. This dog has under performed GM by a mile, and Fiat/Chrysler has pounded them big time due to growth. This company lacks meaningful vision and the stock performance reflects that. Nothing changed with new management as it's still has Ford family oversight. $8 is likely price on this pig.

Funny, here's my comment from Feb of this year. Had people tell me I was wrong and how great this company is. I called it as $8 likely and look at where we are today. [emoji41]

 

[Fedup]

I never touch these kinds of stock ever. But Ford was doing the best among all the cars company when Mullaley was in charge. I bough Ford bonds back in 2004-2006 time frame.

 

[RobbieB]

Did he unload anything else as well?

Yup, of all the stuff I had he sold off more than half of it.

 

[bobandsherry]

Yup, of all the stuff I had he sold off more than half of it.

Hmm... So F was good, but seems maybe more luck than skill if he sold off half of your holdings, unless they were pigs like F.