I've owned quite a number of cars made by the Ford Motor Company (NYSE:F) over time and they've all been good ones. I had a 1968 Galaxy which was as beautiful as it was a joy to drive. I've had several F-150's and there wasn't a loser in the bunch. My wife had an Escort which gave us a quarter million miles. If we had put new tires and front wheel bearings on it, I think we would have gotten another 50 thousand good miles from it, possibly more. It was a good, stout little ride. My wife still misses that car.
The reason I'm writing about Ford is to address a simple question. Why has Ford stock taken such a sound thrashing over the last two years? In 2004, Ford stock was happily playing around in the range of $12 to $16 a share. In 2005, a steady decline began. Ford shares had started '05 just in range of $14 but ended the year near a miserable $8 a share. The picture has not improved for 2006. After dipping as low as $6.06 this year, a bit of recovery has occurred, however unsatisfactory. Ford shares have nipped at $9.50 within the last 52 weeks but they rest at an uncomfortable $8.18 at the end of yesterday's trading. I've looked and searched and asked around. No one has provided a truly solid answer to my simple question of why Ford shares been beaten down so badly.
If no one can provide me sound reason why Ford stock is performing so poorly, then there's only one thing I can do. I must paint you a picture of why Ford's stock deserves better treatment, so here it is from me to you.
Ford never gave up on the fact that America loves a full size, heavyweight, luxury car. Did you know that you can order a fully equipped, V-8, rear wheel drive, 2007 Crown Victoria for under $29,000? If you put one of these beauties on the road, Kia's, Toyota's and Nissan's still tremble. It's been that way for a long time. It will be that way for a long time to come.
Then there are the F series trucks. I've owned more than a couple. As good as any on the road and better than most, has always been my opinion. I'd own a Ford truck right now if I didn't get such a good deal from my brother on my Chevy. I am especially pleased with the changes in the design appearance that Ford has accomplished with their trucks. American truck makers didn't take long to figure out that we like trucks that look like trucks. We buy our pickup trucks for working. They had better look ready to work. Save those sloped front ends for the minivans. Soccer moms seem to like 'em.
I am especially impressed with Ford's 2007 Escape hybrid. This fiery little puppy will deliver you an estimated 36 miles per gallon in city driving! I knew it could be done and Ford did it. Now you may understand why OPEC has lost so much power. Threaten us with oil production cuts? Fine, we'll use less then... thanks. Send our regards to Osama. We'll call him when the hot dogs are ready.
The best reason I can think of why any stock value should be well respected is encompassed in one term these days. For me, that term is diversification. In case you aren't aware of how diverse Ford is, let me give you a basic course in Ford Motor Company auto marketing perspective. Ford Motor Company has strategically positioned itself to be readily available to virtually any sector of the consumer motor vehicle market. They have covered so much ground by acquisition that I think they have greatly outpaced the public awareness about them.
Ford Motor Company's holdings include at least partial or past interest in: Aston Martin, Daimler, Jaguar, Land Rover, Lincoln, Mazda, Mercury, Volvo and Ford Credit. Ford also supplies chassis for buss manufacturers and Ford is deeply involved in numerous racing projects.
When comparing Ford Motor Company with other long term American manufacturers, I have to say that Ford has kept up with the best of them. I am at a loss to give a good justification for why their stock value has been beaten down so badly over the last two years. You will need to do deeper research than I have in order to come up with a viable analysis of their corporate condition, but at the level of commercial presentation, for me Ford has always and still does pass the test.











Reader Comments (Page 1 of 2)
11-30-2006 @ 11:17AM
Tim said...
FORD? THPPPPPPPT! Found On Road Dead!
11-30-2006 @ 11:53AM
BGM said...
Gary sure likes Ford. Problem is, there are far fewer Garys in the world today (than back in 1968). I used to wear Sears toughskins. Today I wear Brioni. I used to drive Ford...
11-30-2006 @ 12:29PM
William Dollar said...
My first car was a 1950 Mercury, and it was a thrill to drive. My current car is a 2002 Lincoln Continental, and it too is a thrill to drive. The thought of this fine automobile company going out of business is very unsettling to me. Hopefully, they can pull out of their current mess. Perhaps the new CEO can save the day. I sure hope so!
12-02-2006 @ 12:51AM
Bryan said...
I think you fail to take into account the design of the cars. You seem to like the $29,000 Crown Victoria but I don't know of any car fashion conscious person who would be caught dead in one of those ugly boats.
From what I've observed Ford has the least attractive cars of all of the domestic cars. Sure, the Fusion is a step forward but it still looks like a cheap knock off of an Audi.
The other car makers are doing better simply because people like their designs better.
11-30-2006 @ 4:08PM
James W. Harter said...
My first car was a 1930 Model A when I was in high school. I have also owned two 1950 Fords. One of these was a yellow convertible with a black top. It would be worth a lot of money today. I also owned a 1950 Mercury which was a great car and a 1956 Lincoln.
I don't owm a Ford product now, but do have some Ford stock. It has to be a bargain at these prices.
11-30-2006 @ 4:07PM
James W. Harter said...
My first car was a 1930 Model A when I was in high school. I have also owned two 1950 Fords. One of these was a yellow convertible with a black top. It would be worth a lot of money today. I also owned a 1950 Mercury which was a great car and a 1956 Lincoln.
I don't owm a Ford product now, but do have some Ford stock. It has to be a bargain at these prices.
11-30-2006 @ 2:08PM
Robert Paul said...
Ford automobiles have always been, and will continue to be, one of the most reliable machines on the road.That pretty-looking Audi won't help you when you are stranded somewhere on a dark country road.
Ford stock is at a low point right now. It should be priced much higher. Start buying the stock now. By late 2007 or 2008, the stock will be close to $30. per share. Maybe higher.Look out by 2009. You'll thank me!Remember--BUY AMERICAN!
11-30-2006 @ 3:08PM
Victor said...
I've owned Fords/Mercurys since 1957 I can only remember one (1) that gave me any problems. I'll
still be buying them for a long time.
11-30-2006 @ 2:45PM
Chris said...
I agree Ford has developed good cars over the years, sure they have developed some ugly one's but they have also made some attractive one's as well. since when has the like's of the asian company's develop attractive cars, they dont and there SUV's and Trucks are even worse, so come on if you think Ford has bad cars open your eye's.
Ford has always produced cars for the masses and has over the years done a good job of that, that is why it's one of the world's most respected car manufacturer's, it is,quite simply an Icon. Sure it's going through a tuff time, but does'nt everyone, the problem is we are sending our own company's down the river, for the sake of buying a cheap asian import, ok we save a few thousand here, but in the long run thats not doing our economy any good, come on everybody, we need to see the bigger picture here and be loyal. How long do you think these imports are going to remain cheap, not long as the remainder of the asian country's are developing fast, and when happens cheap labour will go out the window.
11-30-2006 @ 3:03PM
Jeff said...
I too am a Ford fan but not just Ford, I am an American car fan. The loss of the jobs that Ford has recently lossed is only part of a much larger, more grim picture. Ford, GM and Chrysler have been doomed when the accountants began running the companies. I work for an industry that supplies the auto industry. For many years, the main concern has been cost. The accountants would rather have warranty issues than provide a better vehicle that may cost another $100 or $200 dollars. I love the new Mustang and the F-150 has always been a great vehicle. Now if Ford and the rest of the American auto makers can start making cars that are cutting edge in design, we would be back on top. I would also like to see them take the lead in developing a car that does not run on gas. We could take the lead in the world and once again dominate!
11-30-2006 @ 6:31PM
Gene said...
Why is the stock down? Try losing 7 billion this year, and a forecast to lose 17 billion more before showing any profit in 2009.
12-01-2006 @ 11:54AM
Arnie said...
We have a 1989 convertible 4 cylinder Mustang with 147000 miles with only minor maintenance on it for which I had to take it to the shop. I am 76 and do all the regular things (brakes, oil, etc) myself. It is very easy to work on.
Needs a new trop, but so what. It just goes on and on and runs great. I will keep it foever.
11-30-2006 @ 7:09PM
Donald Hensick said...
Some questions then. 1. Why is it that some Media types seem to enjoy bad-mouthing Ford (and the Domestics). 2. Why do certain people seem to enjoy repeating those same opinions? Do they get vicarious pleasure from jit? 3. What do those media experts have which qualifies them to make those
judgements? and 4. Why is it that when Ford or GM has a recall it gets on the front page in headlines
but a Japanese recall goes into a line or two on a back page?
11-30-2006 @ 4:50PM
David Wright said...
The simple answer is that Ford stock inversely tracks the price of oil. If you want to know what F will do on a given day, check the pre-bell price of crude oil. If its up F is probably going to be down. The pre-election drop in oil prices helped F and GM. Now that crude is gong back up I'd expect F to drop to a support price of 7.75.
The Ford Edge crossover will be in showrooms in Dec. It is going to change F's fortunes dramatically along with the new CEO. Fusion rates higher in reliability than Accord or Camry in Consumer Reports. In other words...a turnaround story. F forcasts a return to profitability in '08. This is likely a conservative estimate.
12-01-2006 @ 2:46PM
Barry W.Sellmeyer said...
Ford, what history books do some of the other Boomers read. While My Father and Father in-Law were using made by Ford Arms and Vehicles to defeat the tyrants that would of taken our future Away. Toyota, Nissianan, Muitshbishi, Audi and Volkwagen Etc. Who and what did they support? Remember Ford has always been there such GM. Buy American and Be American if not. move if you want your Money and loyalty to be with a foreign product or are so cheap you sell out the Country and your Childrens Future.
11-30-2006 @ 11:37PM
George Hagelthorn said...
It's a fact that the Big Three let us down and let the foreign competition take over, but it was with the assistance of the policies that enabled Japan to export less expensive vehicles to our disadvantage. However, what really bothers me is the fact that our national interests are being compromised by the loss of sacrificed industrial capability. General Motors, Ford, and Crysler may never again be as productive as they were when they produced the military necessities of World War II when we were the Arsenal of Democracy supporting our allies. It could be catastrophic in the future if we don't nurture our industrial interests.
I may be a dottering old fool, but my memory has not faded. Because of Pearl Harbor I have never owned a Japanese automobile
12-01-2006 @ 1:40AM
Bethany's said...
We would not trade our Lincoln Town Car for any other car on the market for dependability, looks, and comfort. The gas mileage isn't bad either (about 24 miles to the gallon in town). We also have a Ford customized high top van that we just love for long trips with a queen size bed in the back and a TV that can keep the grandkids busy with video tapes. There is no other car that will give the ride of the Town Car, not even a Cadillac! Bethany's
12-25-2006 @ 3:12PM
Milt Kenworthy said...
FoMoCo has allways been my choice and allways will be ever since my first car in 1954 which was a 1940 Ford coupe "sure wish I had it today". I've owned Ford's,Lincoln's and Mercury's and still own a 1954 Mercury 2dr sedan to which I hope to restore some day. In 1993 I bought a F-150 and as of today at 182000 miles it runs perfect,never even had a wrench put on the engine,burns no oil what so ever and have recorde to prove it.
So with all of that all I can say is that FoMoCo has made a true statement with me.
Thank you Henry Ford
12-01-2006 @ 12:44PM
Dana said...
It is true, Ford has been a long-standing tradition in this country, and it would be a shame to lose another part of our identity. Fact is, though, they are not cornering all of the aspects of the market. Sure, we all like our trucks to look "ready for work." However, the reality is now, people are going for style and performance. No, the days of bailing hay and hauling dirt are not over, but more and more of us are using our vehicles for other sorts of purposes. Not only that, but the demographic has changed in that more Americans are living in urban communities, and leaving town for travel, not work. It is a sad but true fact that not only are the Japanese and Europeans capturing our sense of style (I own Jeep, not Japanese), but also our sense of budget, up to and including fuel economy. Hopefully after some careful restructuring, they can breathe a little life into this American Icon. Good luck. The more choices, the better.
12-05-2006 @ 1:12AM
Sandra Gilbert said...
Stuck on Ford!
Glancing over previous comments on Ford, I totally agree with all or partial thoughts. Ford simply has been in a negative spotlight too long for comsumers to read! Every Ford recall has been extremely highlighted for days by the press. But, have you noticed, other vehicle recalls were found hidden somewhere in the middle of your paper. For instance
Toyota has had huge recalls never publicized. Why? And, the public is asleep on the warrenty advertisement of some vehicles, i.g., "full warranty for 100,000 miles, or 50,000 miles for 10 years." This gets GREAT reviews. The fallacy is, who has only 50,000 miles on a ten year old vehicle? Ford advertises, "full warranty for 50,000 miles, or 50,000 miles for 3 years," and the public is told the vehicle is not well built. By whose standards?
Wake up America! Japan is not buying our vehicles the way we are buying their vehicles! We are selling out our country while the Government does nothing about "insufficient tariffs" on foreign imports making it possible for foreign vehicles to be purchased "BY US" for less. And while we sleep, our country is being taken over by foreign corporations. Where is the press with this? Wake up America! Let's bring back our jobs and a "HEALTHY ECONOMY" for "all the people" to America.