johnnyb82 Posted March 5, 2010 Share Posted March 5, 2010 You just don't get it. Market share is the only thing of importance to the future of the Ford Motor Company. If it goes up, Ford builds and sells more motors, and, under their new corporate philosophy, make more money. MARKETCAP! is the only thing of importance to the future of market wankers. Huh? The goal of Ford is to make money. If it is better at that, the value of the company goes up and the market cap goes up. Market share isn't the goal, making money is. Focusing on market share is part of what got the company in trouble in the first place. Quote Link to comment Share on other sites More sharing options...
kris_norway Posted March 5, 2010 Author Share Posted March 5, 2010 That is why i started this post. To get a debate, if Ford could reach the marketcap price of Honda / Toyota? There is no such thing called 'stable stock prices'. But I agree. Optimism is starting to set in, so we should all maybe think of selling it. Atleast as a foreigner. As an American, i would be very afraid of what happens to the dollar after the US Federal Reserve dollar printing. Your pruchasing power as americans is going to be halved the next 3-5years. So maybe stay in stocks? Ford debt is going to be inflated away with high inflation. K Quote Link to comment Share on other sites More sharing options...
jpd80 Posted March 5, 2010 Share Posted March 5, 2010 (edited) Huh? The goal of Ford is to make money. If it is better at that, the value of the company goes up and the market cap goes up. Market share isn't the goal, making money is. Focusing on market share is part of what got the company in trouble in the first place. No, FNA relied on F Truck and Explorer to carry everything else. When the market changed, they had no choice but to change with it. According to Mulally, Ford now has costs under control and makes money on every vehicle sold, so improving market share has a direct effect on market cap. That's why stock price has shot up so much in the past year. Edited March 5, 2010 by jpd80 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted March 5, 2010 Share Posted March 5, 2010 (edited) That is why i started this post. To get a debate, if Ford could reach the marketcap price of Honda / Toyota? There is no such thing called 'stable stock prices'. But I agree. Optimism is starting to set in, so we should all maybe think of selling it. Atleast as a foreigner. As an American, i would be very afraid of what happens to the dollar after the US Federal Reserve dollar printing. Your pruchasing power as americans is going to be halved the next 3-5years. So maybe stay in stocks? Ford debt is going to be inflated away with high inflation. K 1. Ford market Cap will continue to increase 2. There may be no such thing as stable stock prices but volatility is something investors watch for. 3. The US doller will recover in the next three to five years, just as the world didn't see this one coming, they can't see the recovery either. And the stock market didn't pick Ford's resurgence either. All the dumbass financial advisors and traders looked at market cap and ran the other way... 4. A lot of that "printed money" was actually loans to institutions that are due to repay it soon with interest. 5. There's no evidence of any emergent inflation, the dollar is depressed - remember? Edited March 5, 2010 by jpd80 Quote Link to comment Share on other sites More sharing options...
Marginal Economist Posted March 6, 2010 Share Posted March 6, 2010 The last time Ford had a market cap over $40B was in 2000/2001 time frame. They were selling close to 4M units a year and did not have $35B in debt. I do not think Ford should have a market cap nearly this high and that is why I'm now on the sidelines. Quote Link to comment Share on other sites More sharing options...
Noah Harbinger Posted March 6, 2010 Share Posted March 6, 2010 The last time Ford had a market cap over $40B was in 2000/2001 time frame. They were selling close to 4M units a year and did not have $35B in debt. I do not think Ford should have a market cap nearly this high and that is why I'm now on the sidelines. Don't forget to convert that to real dollars: Drop the today's net worth by 25% to put it in 2000 dollars. Not that your point isn't valid - you're quite right that the current price is based on speculation, rather than current performance. But I think the speculation is well founded. The Toyota meltdown has been perfectly timed to coincide with Ford's rebirth, and I think the widespread opinion that Ford stands to grow the most, in the US and internationally, is justified. Of course, I hate playing with speculators... Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted March 6, 2010 Share Posted March 6, 2010 Don't forget to convert that to real dollars: Drop the today's net worth by 25% to put it in 2000 dollars. Not that your point isn't valid - you're quite right that the current price is based on speculation, rather than current performance. But I think the speculation is well founded. The Toyota meltdown has been perfectly timed to coincide with Ford's rebirth, and I think the widespread opinion that Ford stands to grow the most, in the US and internationally, is justified. Of course, I hate playing with speculators... Huh??? Ford is picking up gobs of market share every month, is finally strong in cars and not just trucks, has a much lower cost structure, doing very well in Europe, Canada, and China, and has been profitable for a year now with no end in sight plus credit rating has improved markedly. I know because I own Ford notes and the improvement in the price is significant. Also, resdual valuse are way up and incentives down. None of this good news is speculation and is reflected in stock price. Price targets have been raised to $15 by most analysts. Yes, their balance sheet is still damaged, but improving rapidly. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted March 6, 2010 Share Posted March 6, 2010 (edited) The last time Ford had a market cap over $40B was in 2000/2001 time frame. They were selling close to 4M units a year and did not have $35B in debt. I do not think Ford should have a market cap nearly this high and that is why I'm now on the sidelines. Everything Nasser did was to balloon that stock price up at the expense of the $25 billion cash tin he inherited. That's why Ford posted a $5 billion loss for 2001, Bill Ford had to step in and rescue the company with a $4 billion restructuring plan.... Edited March 6, 2010 by jpd80 Quote Link to comment Share on other sites More sharing options...
Noah Harbinger Posted March 7, 2010 Share Posted March 7, 2010 (edited) Huh??? Ford is picking up gobs of market share every month, is finally strong in cars and not just trucks, has a much lower cost structure, doing very well in Europe, Canada, and China, and has been profitable for a year now with no end in sight plus credit rating has improved markedly. I know because I own Ford notes and the improvement in the price is significant. Also, resdual valuse are way up and incentives down. None of this good news is speculation and is reflected in stock price. Price targets have been raised to $15 by most analysts. Yes, their balance sheet is still damaged, but improving rapidly. I think you understand my point, though. Their balance sheet ISN'T good now - but their stock price is as high as you would expect if they DID have a strong balance sheet. Therefore the current price reflects that the belief that Ford will recover (and improve their balance sheet) is widespread. Just because you or I believes it unlikely that Ford will fail, doesn't make it any less speculation. Supposing the worst were to happen - suppose the Fiesta and Focus launched to a dozen recalls, like the Focus. Buyer goodwill dries up, market share plummets, profits evaporate: the stock will freefall, maybe even bring the company to bankruptcy. Anyone buying Ford stock right now is betting that won't happen. Well, I think it won't happen either, which is why I'm not selling my holdings. But I do acknowledge that the price is based on the assumption of success, rather than the current balance sheet. It's well-founded speculation, but speculation nonetheless. Edited March 7, 2010 by Noah Harbinger Quote Link to comment Share on other sites More sharing options...
jpd80 Posted March 7, 2010 Share Posted March 7, 2010 Anyone buying Ford stock right now is betting that won't happen. Well, I think it won't happen either, which is why I'm not selling my holdings. But I do acknowledge that the price is based on the assumption of success, rather than the current balance sheet. It's well-founded speculation, but speculation nonetheless. The market knows Ford is negotiating the sale of Volvo and will finalize the deal sometime in Q2. Cash on hand is $25.5 Billion and debts amount to $34 billion, Ford is meeting all of it's payments and has successfully renegotiated extensions on credit deadlines. Ford Credit is slowly coming back to life and customers are supporting ford vehicles. I think that is a pretty good report card, no wonder Ford stock is buoyed in less than stellar economic times. Quote Link to comment Share on other sites More sharing options...
kris_norway Posted March 7, 2010 Author Share Posted March 7, 2010 I agree with many of the last comments. Also regarding the thing that Fiesta and Focus can fail. It is important to sell when everyone is optimistic. But the question is - when is maximum optimism? It is clear when looking at analyst meaning, that they are starting to become happy. The Ford stock might correct in not to long also? Its gone far, fast... I think I will wait until Q1 numbers. Se the finalized sale of Volvo and the cash it brings. Se if analysts , which average the stock as OVERWEIGHT, put it up another ticker - to BUY rating. Then I think I will sell.... I have been in this stock for 3 years now. K Quote Link to comment Share on other sites More sharing options...
kris_norway Posted March 7, 2010 Author Share Posted March 7, 2010 (edited) I just checked the anual report from 2001. Volvo has 2500 dealers world wide. Lincoln has 1560 worldwide. Lincoln sold 159 000 cars that year. Volvo sold 406 000 cars. In my eyes, as I know Volvo from Europe. They should have kept Volvo. Used Volvo as basis for the premier lincolns. Move Volvo in instead of the mercury lineup. Kill mercury. Move Lincoln higher up - above audi or bmw in quality. Anyways 1.8 billion shares was outstanding in 2001. At at stockprice of around 30-35 = $60 billion. As we are at $44, it is awfully close to a sell. But at the same time - the dollar has depreciated quite substantially. 30-40% since that time. meaning that Ford might return to $80 billion marketcap. Aprox twice today? If everything goes right. I will sell out on Q1 after Volvo sale is confirmed and we get some earnings numbers for Q1 which should be good after the Toyota failure.. When does usually Ford release quarterly Q1 earnings? K Edited March 7, 2010 by kris_norway Quote Link to comment Share on other sites More sharing options...
jpd80 Posted March 7, 2010 Share Posted March 7, 2010 (edited) Volvo Financial Results are posted as part of Ford's quarterly results but have only been reported separately from Preformance Auto Group since 2008, the 2007 figures are mentioned in 2008 reports. Here is a Link Over the past three years, Volvo has lost nearly $2 billion for Ford, can you now see why Mulally says they must go. 2007 Q1 $94 million profit Q2 $91 million loss Q3 $167 million loss Q4 Break Even 2008 Q1 $151 million loss Q2 $121 million loss Q3 $458 million loss Q4 $736 million loss 2009 Q1 $255 million loss Q2 $231 million loss Q3 $135 million loss Q4 $32 million loss Edited March 7, 2010 by jpd80 Quote Link to comment Share on other sites More sharing options...
kris_norway Posted March 8, 2010 Author Share Posted March 8, 2010 I agree that Volvo in current state is not good. But the brand. The patents. The R&D. But anyways - to totally restruct volvo would probably cost billions. So easier to make Lincoln the luxury. Not Volvo. As far as I understood, the last decade, Volvo has generated alot of profits for Ford. Really alot - which Ford has taken back to the US. But I might be wrong. I just remember to have read that somwhere.... Quote Link to comment Share on other sites More sharing options...
ausrutherford Posted March 8, 2010 Share Posted March 8, 2010 Volvo Financial Results are posted as part of Ford's quarterly results but have only been reported separately from Preformance Auto Group since 2008, the 2007 figures are mentioned in 2008 reports. Here is a Link Over the past three years, Volvo has lost nearly $2 billion for Ford, can you now see why Mulally says they must go. 2007 Q1 $94 million profit Q2 $91 million loss Q3 $167 million loss Q4 Break Even 2008 Q1 $151 million loss Q2 $121 million loss Q3 $458 million loss Q4 $736 million loss 2009 Q1 $255 million loss Q2 $231 million loss Q3 $135 million loss Q4 $32 million loss Maybe Ford is waiting to see if Volvo is posting a profit for Q2 before they will go ahead with a sale. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted March 8, 2010 Share Posted March 8, 2010 (edited) Maybe Ford is waiting to see if Volvo is posting a profit for Q2 before they will go ahead with a sale. Chinese firm Geeley have done due diligence and know what is coming, I suspect that like Tata they will agree to a proposed product cycle plan for the next five years as well as power train supply form Ford Europe and technical support to Volvo engineering. Ford gets $2 billion from the sale but are also guaranteed income from supply contracts every quarter for the next five years, win-win-win Edited March 8, 2010 by jpd80 Quote Link to comment Share on other sites More sharing options...
weiweishen Posted March 8, 2010 Share Posted March 8, 2010 I agree that Volvo in current state is not good. But the brand. The patents. The R&D. But anyways - to totally restruct volvo would probably cost billions. So easier to make Lincoln the luxury. Not Volvo. As far as I understood, the last decade, Volvo has generated alot of profits for Ford. Really alot - which Ford has taken back to the US. But I might be wrong. I just remember to have read that somwhere.... Actuallyl you are exactly right. I have a friend who worked in the volvo team when volvo was just bought by Ford. At that time, volvo US was in New Jercey. He told me that volvo actually is a invaluabel property for Ford. Ford actually gained a lot of profit from volvo. He left Ford when volvo US move to michigan. The funny thing is that now he is hired again by Ford to work for volvo because Volvo move back to new jercey again last year. He just strongly against the sale of volvo to China. It is none-sense. When economy finally picked up, volvo can be a cash cow for Ford, much better than Lincoln/Mercury. Actually how many people still believe that Lincoln is really a premium car brand. Just look those world class premium car brand, when they do comparison, Lincoln has never been in their radar, but volvo has always been in. Saling a 6 billion worth world class brand to China with less than 2 billion price is really like use a Chinese antique as PISS JUGS Quote Link to comment Share on other sites More sharing options...
Ralph Greene Posted March 11, 2010 Share Posted March 11, 2010 (edited) Logic, experience, and a working knowledge of how the securities markets work would tell us that Ford is generously priced right now for the next 6-12 months of data. Experience and an understanding about how business cycles work tells me Ford could earn $2-3 per share before this business cycle ends in a few years. Depending on their growing market share, size of the new car market, and Ford's ability to hold costs down so as to max out on any incremental business over break even. Noting the number of shares outstanding now. That's optimistic, and more than most analyists predict, but kinda what i'm expecting. Give that about 1/2 of normal market multiples....say a 8-10 times earnings ratio, and I think Ford stock COULD hit $20-30 during this business cycle. We're already seeing the decline of Toyota (for a while anyway), is Honda next, leaving some room at the top of the auto industry for a new leader. Now...lets go out on a limb a little here.....and consider an even wilder possibility. Suppose....just suppose....Ford becomes a "must have" stock for investers. And becomes a must have vehicle for consumers. And the shorts, just looking at the numbers and the history of industrials, build a big short position.....which has to be bought back in as they lose big. You know what that does. Ford is a compelling story....an all american story.... a company that did it the old fashioned way....star power leadership....no bailouts (directly anyway).....terrific class leading products....good marketing.....favorable word of mouth advertising....and the markets start treating it like a google or Apple. And multiples go to 20-1 or more. Then the stock could go much higher than anyone dreams. It's happened before....thousands of times. Nothing surprises me much anymore in the stock markets....anything can and does happen all the time. It's been a long time since an industrial or manufacturing company stock has become the "darling" of investors and captured the attention of the investor group like the hi tech, real estate, some energy companies, Internet companies, etc did of recent business cycles. Maybe it's Ford's (or the new GM) turn to trade way higher than fundamentals support. One thing is for sure.....the average investor will not get this right.....and this stock will surprise a lot of people in one direction or another. I retired early thinking big. Looking for stocks I could accumulate enough shares to make big bucks on. It would have been better if you accumulated your shares before current levels.....but I think you can continue to add to your F positions on pull backs even now. Keeping in mind....the great stocks usually do not pull back enough on corrections to let the masses in. So they get chased....by investors afraid of missing the action......that's one reason they go up higher than expected. The great stocks are usually hard to buy as they go up.....their pull backs aren't so much, and doubters are many. As usual MHO and flame away. Edited March 11, 2010 by Ralph Greene Quote Link to comment Share on other sites More sharing options...
soupy Posted March 12, 2010 Share Posted March 12, 2010 . Ford is a compelling story....an all american story.... a company that did it the old fashioned way....star power leadership....no bailouts (directly anyway).....terrific class leading products....good marketing.....favorable word of mouth advertising....and the markets start treating it like a google or Apple. And multiples go to 20-1 or more. Then the stock could go much higher than anyone dreams. It's happened before....thousands of times. Nothing surprises me much anymore in the stock markets....anything can and does happen all the time. . Seems as though the stars are aligned. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted March 12, 2010 Share Posted March 12, 2010 I would say that Toyota was priced over its fundamentals for much of this decade. I think it had that Google/Apple cachet for awhile. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted March 12, 2010 Share Posted March 12, 2010 (edited) It's funny how things don't pan out the way we envision or the way Economists think, I'm wondering where car sales will be in about 12 months times, whether we'll see a resurgent GM back to its old tricks of pump and dump, Toyota chasing down fleet sales and going after GM, Ford offering quality to retail buyers but dabbling in incentives to boost fleet sales. A very interesting mix of situations indeed. Anyone care to alter my perspective and inject a different tone to the future vision? Edited March 12, 2010 by jpd80 Quote Link to comment Share on other sites More sharing options...
soupy Posted March 13, 2010 Share Posted March 13, 2010 Anyone care to alter my perspective and inject a different tone to the future vision? I don't believe in a double-dip. I believe in a two to three year improving business cycle. That said, when some ask when will we know the ression is over, ( in real life terms) I some what jokingly answer we'll know when gas hits 4.00/gal again. Thus stifling the improving business cycle. What a contradiction? To the future I see Ford launching a hot seller in a market that Ford doesn't compete in at the moment. The Fiesta. To the future the new Focus is going to be special. Look-out Corolla. What timing! Future: eco-boost 4 and 6cyl across all models lines. Hybrids with the best perfomance and milage. Ford bringing the battery and trans work in-house. If the future is 4.00/gal, Ford will be well placed not only survive, but thrive in that environment. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.