Stock of the Year: Ford Motor

I’m being a bit premature, but I’m going to called Ford Motor (F) my 2009 Stock of the Year. Think of what this stock has been through. Shares of F closed out 2008 at just $2.29 a share. Today, the stock broke above $9 to reach a high of $9.14. The shares haven’t been this high in over two years.
The big reason Ford gets props from me is that they haven’t had any help from the Uncle Sam. At the White House Correspondent’s Dinner, President Obama joked that he had been named Car & Driver’s “Auto Executive of the Year.” Funny, sad and true—but it doesn’t apply to Ford.
Last quarter, Ford snapped a five-quarter losing streak by actually posting a profit of 26 cents a share. The consensus on Wall Street was expecting a loss of 12 cents a share. Think of it this way: Ford has gone from burning through $7.7 billion in cash to positive cash flow of $2.8 billion. You know, like, making money!
One major reason for Ford’s success is the Ford Fusion. While U.S. auto sales are down 25% this year, sales for the Fusion are up 15%. Plus, the Fusion was just named Motor Trend’s “Car of the Year.”
Now everyone on Wall Street expects profits and more profits. The fourth-quarter consensus is up to a 22-cent profit from a 12-cent loss. For 2010, the Street average is a gain of 42 cents a share.
There’s even word that George Soros has picked shares of Ford. Paul Ingrassia at the WSJ wrote, “In fact, there’s almost too much good news coming out of Ford’s Dearborn, Mich., headquarters these days.” He’s referring to the ability of union folks to find out where the money is being made.
Ford isn’t out of the woods just yet. The company is currently carrying about $27 billion in debt. However, if business continues to improve, Ford will have achieved one of the most remarkable business turnarounds in U.S. auto history.

Posted by on November 18th, 2009 at 5:31 pm


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