Ford’s F-150 Strategy Gets Another Big Endorsement; Stock Still A Bargain – Forbes
Disclosure: I own Ford shares
Ford’s (NYSE:F) 2015 F-150 SuperCrew model received the highest 5-Star score endorsement for Overall Safety from the National Highway Traffic Safety Administration (NHTSA).
That’s certainly good news for Ford, as it tries to transition from heavier steel tracks to lighter aluminum trucks, to improve fuel efficiency without compromising safety.
The F-150 safety endorsement comes three months after Ford’s new series received a strong market endorsement– Ford Motor Ford Motor Company couldn’t make enough F-150s to keep up with consumer demand. New F-150s raced out of the lot in 9-12 days, much faster than the typical truck.
In recent years, Ford has developed a reputation for quality and innovation, churning out new products, strengthening its brand, and market position. In 2015, the F-150 was named top truck in the North American International Auto Show in Detroit. In 2013, Ford was America’s best-selling vehicle brand for the fourth consecutive year, and Ford F-Series continued as the country’s best-selling truck for the 37th year in a row and best-selling vehicle for the 32nd consecutive year, according to the company’s 2013 annual report.
F-150’s strong performance sales should be good news for Ford’s shareholders, as pickup trucks are a major driver for the company’s profit margins.
Ford’s stock has been weak in a strong market, due to investor anxiety about the company’s plant closures in Europe, where a prolonged stagnation and competition from European carmakers have taken its toll on the company’s sales. But the stock has recovered nicely from yearly lows last November.
Still a good bargain at 8.5 times next year’s earnings and 3.80% dividend.
Ford’s Financials as of 4/16/2015
A few words of caution: Ford’s business is highly sensitive to cyclical fluctuations in the global economy and to economic policy changes (e.g., interest rates). This means that investing in Ford stock is for long-term investors with high-risk tolerance.