Any thoughts on Ford stock?

**Broken Arrow** · 03-30-2009, 07:12 AM

Obviously, the "Big 3" is the quite the talk of the town right now. The deadline for the viability plan is tomorrow, but it's already making a very big impact on today's trading. Dow is down 267 points at this point.

Personally, I don't know if I want to get into this one.... Yeah, I know we're speculating here, but risky is still risky... and this stuff is risky.

However, if I were to make a play on this, I am personally leaning towards Honda (HMC). Honda is obviously one of the strongest brands in the auto sector, and although their sales are also down from decreased global demand, I think they are getting beaten down by proxy more than anything.... They are also better positioned than even Toyota, which has been hit with having to deal with contraction through global expansion.

But again, I don't know. I guess we'll see how things go today and tomorrow.

**EEinNJ** · 03-30-2009, 08:07 AM

I did OK late last year with small, short-term plays on both F and C when bail-outs were first starting. In the time since, I can see what a crap-shoot that was. If you have money to lose or know something we don't, go for it. Even in good times auto companies are not such good investments, lately anything could happen. I sure wouldn't bet on GM!

**simpletron** · 03-30-2009, 09:30 AM

car companies in general are going to have a rough ride for the next couple of years. US auto sales were around 16-17 million in 2007 and this year it's looking like 9 million. forecasts for 2010 while better than 2009, are nowhere near 16 million. this means all car companies are going to have to tighten their belts. but car companies aren't going to cut capacity quickly because they think there will be a quick rebound. this will produce a large glut of cars, which will in turn devalue their newly-built cars when car market does turn around. thus this will lower their profit margins, hurt earnings and stock price for the next couple of years.

the better car stocks to invest in are the smaller companies that haven't over expanded. while toyota, honda, ford are in a better position to absorb this pain than GM or chrysler, none of them will escape it.

people don't buy cars when their jobs are in question. it doesn't matter much that credit is getting easier. the auto industry will only begin to recover once confidence is restored in the general population, and I don't see that happen, yet.

this is the long term look at them. in short term, I have no idea what it is going to do. but I don't feel like playing that game right now, when the next couple of years looks poor.

**disneysteve** · 03-30-2009, 10:01 AM

Originally posted by simpletron View Post

it doesn't matter much that credit is getting easier.

I'm not sure I agree with this. I've seen reports saying that a significant percentage of potential buyers are being turned away due to financing issues. So there are people out there who want to buy a car if only they could get the loan they needed to do so.

I'm not looking at Ford as a long-term investment but rather a short-term one. If I bought 1,000 shares and it went up $.50 or $.75, I'd probably get out. This would purely be for fun and, hopefully, a few hundred dollars profit. I recently made $950 doing the same thing with Bank of America.

**simpletron** · 03-30-2009, 11:32 AM

Originally posted by disneysteve

I'm not sure I agree with this. I've seen reports saying that a significant percentage of potential buyers are being turned away due to financing issues. So there are people out there who want to buy a car if only they could get the loan they needed to do so.

but what percentage of those people would qualify now? there are some that wouldn't qualify no matter what. 20% of the general population has a credit score under 620 and wouldn't be allow a loan under pre-credit crisis standards. so a significant number of potential buyers are turned down all the time.

there is a much larger number of people not even going car lots because of their fear of the economy than were being rejected for credit that can now qualify for credit. and the majority of the people not going, would qualify for tighten credit standards. this is why I said loosing credit doesn't matter much. it will help, but it is no cure all.

car industry can't turn on a dime, so you won't see substained rally in auto stocks are a while. but a .50 to .75 jump could happen just on some good news, then again the opposite can happen on bad news.

**disneysteve** · 03-30-2009, 11:37 AM

I agree that lending standards have been tightened, and rightfully so. I also think, though, that a lot of folks who can afford to buy and can qualify for a loan are sitting on the sidelines not spending because of what they hear on the news about the economy even though they are personally doing just fine. When they start hearing some better news, they'll start spending again. I have no clue when that will happen, but I know that it will happen. People will go back to buying cars and houses and dining out and all the other stuff they have cut back on in recent months.

**tulsa_sr5** · 03-30-2009, 03:09 PM

I think Ford could see a decent bump if it gets announced that Chrysler is going Chap 7 which looks pretty likely to me at this point. They have done well for themselves so far staying away from the bailout trough. I guess if F dipped a bit I could be tempted to make a short term play.

Let us know what you do.

**disneysteve** · 03-30-2009, 05:38 PM

I'll post if I end up buying some.

I'm looking at BAC again. It dropped to almost $6 today. If it falls into the fives, I'll probably grab some.

I'm also buying FXCB, a regional bank in my area. That's more of a long-term play. They've done well, are well-capitalized, didn't get caught up in the whole banking mess, haven't taken any bailout money, etc. Their share price has just fallen along with the rest of the sector, not because of any problems with their company specifically. I already own some. I picked up a little more today. I have an open buy order at $9 but the trading volume is very small so only a portion of my order got filled. If the market continues down tomorrow, I may have some more by day's end.

**disneysteve** · 03-31-2009, 08:22 AM

Ford Motor Co. (F) is offering a new incentive plan to try to jump-start slumping vehicle sales and boost consumer confidence.

The auto maker will offer 0% financing through its finance arm and will cover payments for up to 12 months on any new Ford, Lincoln or Mercury vehicle if customers lose their jobs. The offer will run through June 1.

I wonder if this will help the stock price. It is pretty flat today, right around $2.70.

I did get the rest of my FXCB today at $9. We'll see where that goes.

**Bernz** · 04-09-2009, 06:24 AM

Ford is now above $4/share....were you able to get in? Not sure if I want to buy it at this price point but will definitely keep holding mine. Hoping to get back into the $6 range again.

**tripods68** · 04-09-2009, 06:59 AM

If you have $300 to lose, i would bet on Ford short term before GM to see where the market plays out in the few quarters. But Honda and Toyota are better play right now than Ford in the current environment.

**disneysteve** · 04-09-2009, 08:57 AM

Originally posted by Bernz View Post

Ford is now above $4/share....were you able to get in?

Unfortunately, no. Kicking myself for not buying at $2.70. Had I bought, I probably would have gotten at least 1,000 shares. I wouldn't have minded a quick $1,000 profit.

Any thoughts on Ford stock?