Ford Motor Company (F) is worth another look. Shares were recently upgraded by an analyst with a $17 target price. Shares traded around $10.40 recently, implying upside of 70%, if the target is reached. On average, 12 analysts have an average target price of $13.77 on Ford shares. This great American company was the only company that did not ask for government assistance during the financial melt-down. Led by CEO Alan Mulally, a former CEO of Boeing, Ford reduced the number of types of vehicles, reduced the cost to manufacture, and renegotiated labor costs with its union.
In the third quarter, Ford spent $1.73 million to lobby federal officials on EV (electric vehicle) tax credits, and sought support for ethanol and natural gas vehicles. Ford wants favorable tax credits for natural gas-powered automobiles, and also wants to see EV tax credits to be extended.
When an EV Ford Focus sedan is available, it will qualify for a $7,500 tax credit.
Investors interested in auto companies building electric vehicles should add Ford to their watch list. These cars are already being made by Toyota Motors (TM), a Japanese company. Incidentally, Toyota is hurting from the fallout from the squabble between China and Japan. Both Honda Motors (HMC) and Toyota shares are down substantially in recent trading sessions:
Weak sales in China, along with major recalls by Toyota and Honda, may benefit both Ford and General Motors (GM). Both companies are performing well in a 3-month period:
Ford announced a recall, too, but it is far more minor than that of Toyota and Honda. The company is recalling more than 150,000 Fiesta vehicles, to adjust a side-impact airbag system.
Question to Investors:
Is it time to be bullish on Ford? To properly evaluate this question, investors should look at Ford, its competitors, and have an idea on the general direction of the global economy. Ford is also exposed to China and Europe. A slowdown in those geographies would impact Ford.
Business Section: Investing Ideas
U.S. automobile manufacturers are favorable over foreign makers. They include:
A pure-play electric vehicle manufacturer is Tesla. Shares peaked in July 2012 at $35.96 and steadily declined since.
3. Tesla Motors, Inc. (TSLA, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells electric vehicles and advanced electric vehicle powertrain components. Market cap at $3.16B, most recent closing price at $28.06.
Japanese automobile manufacturers include:
4. Toyota Motor Corporation (TM, Earnings, Analysts, Financials): Engages in the design, manufacture, assembly, and sale of passenger cars, minivans, and commercial vehicles. Market cap at $133.3B, most recent closing price at $77.32.
5. Honda Motor Co., Ltd. (HMC, Earnings, Analysts, Financials): Engages in the development, manufacture, and distribution of motorcycles, automobiles, and power products primarily in North America, Europe, and Asia. Market cap at $56.93B, most recent closing price at $31.43.
Written by Chris Lau. Disclosure: Author has a long position on Ford shares.
To interact and discuss these picks with users, attach your watch list or portfolio to your friends on Kapitall. Message the author. He is ranked sixth (by points) on the all-time leaderboard. The leaderboard is located on your score icon -> Leaderboard. Members on Kapitall earn free points, and even more points with every Kapitall Generation trade. These points may be redeemed for goods at the Kapitall store.
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Ford Motor Co. (F, Chart, Download SEC Filings)
- General Motors Company (GM, Chart, Download SEC Filings)
- Tesla Motors, Inc. (TSLA, Chart, Download SEC Filings)
- Toyota Motor Corporation (TM, Chart, Download SEC Filings)
- Honda Motor Co., Ltd. (HMC, Chart, Download SEC Filings)
New to Kapitall?
1. New to the site? Click here to register for a free account, and gain access to more tools and data
2. Looking for more investing ideas like this? Click here to sign up for your free copy of Kapitall Weekly
3. Follow us on SeekingAlpha, Motley Fool, Nasdaq and Twitter