Contrarian bet on Ford?

**Broken Arrow** · 06-21-2006, 06:40 AM

Re: Contrarian bet on Ford?

This is just my personal opinion, and I admit I don't have a good insight on the company.

However, it's obvious that part of the decision-making process should be weighed against whatever products they have in the pipeline.

Right now, due to the gas crunch, fuel-efficient cars are hotter than ever. Unfortunately, this is a section of the market that the US automakers are falling short on. Still worse, for the longest time, the ONLY thing Ford has that is even remotely competitive is the Focus, and they haven't been selling well. Here is a good article on all this.

According to the article though, they're working hard to update the Focus and adding 2 or 3 new models of fuel-efficient vehicles by 2008. Will it be enough to turn the company around, or will that be too little, too late?

Rumors have also been running around that Ford has built a new factory in Mexico to build these new cars. Bad for our blue-collar workers, but probably good for the company overall.

Fortunately (if you want to look at it that way), Ford has been chugging away at their F line of trucks with new R&D. You can see some of those tidbits here.

The last area worth mentioning is in the muscle car area, and Ford is still well-positioned with a loyal following in the form of the Mustang. Development here continues with the Shelby GT500 to add alongside the Cobra and the GT. Although I don't know for sure, it's probably safe to assume that the chassis remains as moddable as its predecessor, having given birth to variants such as the Saleen Mustang.

All-in-all, while Ford is down, with its trucks and muscle car, it's unlikely that it's out for good. What I think Ford needs to do is to turn around as quickly as possible by regaining a foothold in the mainstream, fuel-efficiency car market. The question is whether they can muscle back into an area dominated by the Honda and Toyota? Still, they are taking steps in the right direction.

**Russell** · 06-21-2006, 08:57 AM

Re: Contrarian bet on Ford?

I think both Ford and GM have been around to ride out some very tough times and I have no doubt they'll both bounce back...however, it may take a long time but that's ok since most of us are saving for the long term. I still think buying individual stocks is quite risky and I plan to stick to index/mutual funds for the most part.

**sweeps** · 07-05-2006, 10:31 AM

Re: Contrarian bet on Ford?

Well, GM is up about 50% in the last 3 months. Last call on Ford?

**sweeps** · 09-12-2006, 11:41 AM

Re: Contrarian bet on Ford?

Ok, maybe it's time to sell. $6.30 to $9 in 3 months. I'm happy.

**Broken Arrow** · 09-12-2006, 12:50 PM

Re: Contrarian bet on Ford?

For what it's worth, I heard that Bill Ford has resigned as the CEO of Ford Motors corporation. I think that's a very momentous occasion, and no doubt it coincides with what's going on with the company as well. I don't know. I mean, could this possibly be a sign of things to turn around? Or does that mean the ship has already sunk?

**Broken Arrow** · 09-14-2006, 06:20 AM

Re: Contrarian bet on Ford?

This article names Bill Ford's successor. Alan Mulally is a former Boeing management who helped engineer Boeing's turnaround, and they're hoping he can do the same for Ford. Ford is showering him with overly-generous gifts just to get him to come on board. To me, this kind of courtship ... reeks of desperation.

There are two minor concerns that would trouble me if I was an investor:

1. Mr. Mulally's won't have free reign over the company. For better or worse, the Ford family will still have a dominanting influence. In fact, I believe Bill Ford is still staying on as the chairman of the board!

2. Mr. Mulally is 61 years old. Nothing wrong with that, but that also means he will most likely contemplate retirement sooner rather than later. Some "analysts" speculate that his tenure will not be long enough to engineer a successful turnaround.

3. Well, I don't know if this counts as a concern or not, but while Mr. Mulally may know airplanes, as far as I know, he does not have any prior experience with the auto industry. How this will affect anything, if at all, remains to be seen.

When you put all these things together, and if I was an investor with money at stake, I'd probably be a little concerned and itching to sell.

Of course, the contrarian bet is to ignore all that "speculation" stuff and buy more! After all, their new products in the pipeline is starting to reflect what I believe the market wants (even though they'll be fighting an uphill battle against the resident 800lbs gorillas, Toyota and Honda). Also, you DO have a man who supposedly knows turnaround. (Or, did the Airbus falter by their own design?)

In the end, I believe the Ford stock is best suited for people who are willing to brace for a long and turbulent ride.

**sweeps** · 09-15-2006, 10:09 AM

Re: Contrarian bet on Ford?

Whew. Good thing I sold. Down 13% today.

**autoxer** · 09-15-2006, 10:13 AM

Re: Contrarian bet on Ford?

Todays announcement certainly didn't help:

Page Not Found (404) | USA TODAY

http://www.usatoday.com/money/autos/2006-09-15-ford-newcuts_x.htm

Ford (F) said Friday that it no longer sees a return to profitability in North America by 2008, as it had planned, and laid out a new series of cost-cutting goals, including cutting 14,000 white-collar jobs, slashing manufacturing output 26% by 2008 and suspending its stock dividend.

http://finance.yahoo.com/q?s=F

**BTC** · 09-15-2006, 10:29 AM

Re: Contrarian bet on Ford?

We could be witnessing the beginning of the end of the UAW.

**wannabefree** · 09-20-2006, 06:59 PM

Re: Contrarian bet on Ford?

I think a contrarian play with Ford is an interesting idea but I feel it is a bit to risky & speculative. The labor unions are too powerful and the automakers are hamstrung by all of their union contracts

**7thseer** · 09-21-2006, 03:02 AM

Re: Contrarian bet on Ford?

Contrarian plays can be great, but IMHO there are currently better plays with less risk than Ford.

**sweeps** · 09-21-2006, 04:21 AM

Re: Contrarian bet on Ford?

Originally posted by 7thseer

Contrarian plays can be great, but IMHO there are currently better plays with less risk than Ford.

You forgot to say: "Come to my web site for more details."

**7thseer** · 09-21-2006, 04:28 AM

Re: Contrarian bet on Ford?

Originally posted by Sweepsplayer

You forgot to say: "Come to my web site for more details."

No, I really think Ford is currently too risky for small invidual investors even though the price has plummeted. The company is making huge losses, generally investing in companies that are not making profits is riskier. But everyone must weigh the risk vs. gain for themselves.

Thanks for the warm welcome

**sweeps** · 09-21-2006, 04:41 AM

Re: Contrarian bet on Ford?

Welcome

I just find it humorous when someone criticizes another poster's suggestion, but doesn't offer his or her own suggestions.

Btw, please read the forum rules. Links in signatures are not allowed until you've been a member for a week and have 15 posts. Thank you!

Contrarian bet on Ford?