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With two months already under our belt this decade, I decided to get a jump on things and announce that Ford Motor (F) is my Stock of the Decade. You heard it here first.

Now you may be thinking this is a bit pre-mature. I understand, but lets it’s never too early to get on a good story.

While every business journalist writes a new column every time someone at Goldman Sachs hiccups, they’re ignoring one of the most remarkable business turnarounds in recent history. Just 15 months ago, shares of Ford reached a low of $1.01. The stock is currently close to $12 today.

Most impressive of all, despite a nasty recession Ford is actually making a profit. Not a big profit, but a profit nonetheless. More money is coming in then going out. These days, that’s something to notice. Also, Ford hasn’t taken a dime in bailout money.

Not only has Ford made a profit in its last two quarters, but the company has beaten Wall Street’s earnings forecast for the last four quarters in a row. In November, Wall Street was expecting a loss of 12 cents a share. Instead, Ford posted a profit of 26 cents a share. That impressed Wall Street so much that they expected 26 cents a gain when Ford reported earnings again a month ago. This time, Ford said it made 43 cents a share.

In 2006, the company unveiled its “The Way Forward” strategy designed to get the company moving again. Later that year, Bill Ford stepped down as CEO and Alan Mulally came in. Shortly after he joined, he bet everything—and I mean everything—on a gigantic $23 billion loan. They even had to put up Ford’s name as collateral. So far, it's working. The company has slashed its workforce in half and shut down plants. Mulally sold off brands like Jaguar, Land Rover and Aston Martin and concentrated on smaller cars.

Ford’s 7.45% bond due in 2031 had a yield to a maturity of 33.2%. Now it’s down below 9%. Still, Ford has a long way to go. Mulally said they won’t be solidly profitable until next year. But if all goes well, Ford could easily be a $20 stock.

Posted by edelfenbein at February 26, 2010 12:00 PM