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Best & Worst: Ford still America's family company, but the family is struggling

This post is written as part of AOL Money & Finance's Best & Worst 2006. If this post convinces you that Ford can make a comeback, cast your vote.

Recently I wrote a blog post about some of the nice things Ford Motor Company (NYSE: F) is doing. It was just an overview and the article was cursory at best. A member of our excellent editing staff suggested that I might have readers who want a bit more explanation of just what has happened with Ford's stock market value over the last year. I think that for an even better perspective, I'll need to take you back ... way, way back....

Ford Motor Company's stock value entered this decade at $29.30 (the actual per share value was $53.51 but there's a split adjustment factored in). By the end of 2000 Ford stock had slipped to $23.44. One year later the shares had deflated to $15.95 and by the end of 2002 investors were viewing in amazement a stock value of just $9.58. In 2003 Ford took an upswing and shares ended that year at $16.18. But 2004 ended at $14.80, 2005 nearly halved that value to $7.90, and 2006 is shaping up to finish with Ford Motor Company shares close to today's ending price of $8.13. Two factors that must be considered when viewing this historical trend are: In 2000 Ford's daily share trading volume was in the range of 3,300,000, whereas yesterday's trading volume for Ford was over ten times that much at 30,530,400 shares. How do total share availability and volume traded affect the overall price? I'll honestly tell you, that information is just plain "over my head."

For the sake of this article I'm going to take a layman's uneducated guess and say that based on what I've seen, Ford's stock value right now should be around $14.00 to $16.00. That will at least give me a value to point at and say, "Well, then why isn't it that?" Let's take a short look back to see what things may be affecting investor perspective, then we might get a feeling for why Ford's stock isn't doing any better or why it should be.

Based on available figures, Ford ranked as the third largest auto maker in 2005. Ford has also been listed as one of the world's ten largest corporations. As late as 1999, Ford still maintained standing as one of the world's most profitable corporations. Therein lies our first revelation, Ford just isn't quite that profitable at this time. Profitability generally supports stock value. Even a rank amateur like me knows that. Additionally, the size of Ford's piece of the North American market share pie has not increased since 1995. These are certainly not signs that a company is crumbling, but they are facts that will most definitely color investor perception.

On September 5, of this year, William Clay Ford, Jr., stepped down as Ford's CEO and named Alan Mulally as his successor. There was not much fanfare surrounding the change, but as expected it was widely covered. Alan Mulally is a no-nonsense, straight-to-the-point type of leader. He came to Ford directly from Boeing Corporation, where he held the title of executive vice president. He was also CEO of Boeing Commercial Airplanes. He began his career with Boeing as an engineer. He has come up through the ranks as a time-tested and honor-driven company man. He's a natural choice for this job. He came to Ford knowing that the odds are tipping against American manufacturers in an increasingly tough world economy. I don't think he's afraid. He has seen most all of this before. He knows his way around business and government. I think he's a good fit for the job.

Ford has announced its intent to produce over a quarter million hybrid cars by 2010. I'm already thinking it will surpass that. Given the enormous surge of interest in green vehicles and the quickening competition, I expect Ford will accelerate its program. When green vehicle technologies first entered into the realm of production reality, consumer reaction was stunted. Now, as high-quality, tangible examples are showing up in showrooms, and they're looking good, the public is stepping up its interest. If Ford does even just an acceptable job of steering into this new market sector and provides vehicles that are up to previous standards, I see no reason why Ford and all American auto makers cannot capitalize on hybrids in a big way. These hybrid vehicles will not be just a passing fad. These automotive wonders will be the leading edge of tomorrow's transportation technologies. A decade from now OPEC will be little more than an annoyance.

Are better days ahead for Ford? Would I like to own their stock? To both those questions I say yes, and if I had the money I'd buy some shares right now. At the closing price of $8.13 a share, I'd like to think I know a bargain when I see one. Whether I'm right or wrong only time will tell, but I'd plunk some of my money down. I think Ford's a no-lose proposition. If the bit of insight I've given right here isn't enough to sway you, then I'll sum it up in this one final statement: I'd wager my next paycheck on Ford to win. And folks, I'm not a gambler.

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Last updated: October 13, 2008: 12:16 AM

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