I’m a bit light in consumer discretionary sector, Ford looks like a worthwhile candidate. So I hope to open a position in Ford Motor Co -(F:NYSE) to help increase my holding in that sector. If the market continues to drop, there is a good chance I can pick up Ford at a great price.
Bottom Fishing for Ford
I will initiate a buy for 1/4 of my target position before the market opens on Tuedsday. I will try to pick up Ford on a dip at $10 per share, currently the stock is trading at $10.40.
09/01/11 01:10 pm ET … S&P KEEPS BUY OPINION ON SHARES OF FORD (F 11.12****): Ford reports 11% higher August sales volume, year to year. Sales gains were led by sharply higher utilities volume, as gas prices have become range-bound for now, by our analysis. Sales of the small-sized Fiesta car surged 76%. Separately, following
recent indications of slowing economic growth, we cut our ’11 EPS estimate by $0.08 to $2.02. Although we expect pretax profit to rise 19% in ’12, we cut our EPS estimate by $0.16, to $1.94, on an increase in taxes. We lower our target price by $1, to $17, or 8.8X our ’12 estimate, based on historical and peer P/E analysis. /E.
The Street recently rated Ford a B- BUY. The company’s strengths can be seen in multiple areas, such as its notable return on equity and revenue growth. The company’s strengths can be seen in multiple areas, such as its notable return on equity and revenue growth
Schwab’s most recent report rates Ford an ‘A’ Strongly Outperform and puts F in their top 2 percentile ranking.
Here are some key numbers, all which point to an opportunity with Ford.
F seems inexpensive with a PEG value of 0.799, below the Auto & Truck Manufacturers industry median PEG of 0.8, which is supported by a PE of 6.2188 that is also below the industry median of 12.07.
Although it reduced the percentage of debt used in its capital structure this year, F has a Debt to Total Capital ratio of 94.85% and is among the most highly leveraged companies in the Auto & Truck Manufacturers industry.
F is very efficient in comparison to its peers with a Return on Equity, Revenues Per Employee, and Return on Assets of 786.86%, $798,548.80, and 3.93% respectively. In particular the company is among the best at generating revenues from employees and at managing their owner’s equity, and is above average at managing their resources compared to other companies in the Auto & Truck Manufacturers industry.
My only concern is the debt load of the company. F has a Debt to Total Capital ratio of 94.85% and is among the most highly leveraged companies in the Auto & Truck Manufacturers industry.