Ford

  • 17 Mar
    Ford Is Cheap, But Should You Buy It Now?

    Ford Is Cheap, But Should You Buy It Now?

    • Today, we’ll discuss what’s most important when analyzing a company like Ford: fundamentals, the economy, sales, intrinsic values, cars, and the stock price.
    • When investing in Ford, you have to think about what the stock price will be when the earnings turn negative. They always do.
    • I’ll show you 3 models that will explain the current price for Ford.



    Why Is Ford So Cheap?

    Many see Ford (NYSE: F) with a price to earnings ratio of just 5.6 and a dividend yield of 5.66% as an extreme bargain. That might be true at first glance, but those who think so haven’t seen economic cycles. More →

  • 21 Apr
    An Investigation Into the Relative Cheapness of the Automotive Industry

    An Investigation Into the Relative Cheapness of the Automotive Industry

    • With a PE ratio of 5 to 10 the automotive industry looks attractive
    • The risks are that the industry is considered to be at a historical peak by most analysts
    • A global perspective gives a bullish outlook for the industry

    Introduction

    The automotive industry is usually called a cyclical industry, considered elastic in relation to GDP and vulnerable to economic shocks. According to a former Ford chief economist a normal recession reduces sales by 15%. With sales being reduced by 15% and costs being inelastic the decline in sales is the one that makes the difference between strong earnings and big losses. Any sign of a recession puts people off from buying new cars and makes them stick to the car they have for a little longer. Connecting the cyclicality and cost inelasticity with the current valuation for automotive companies brings to interesting conclusions. More →

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