Ford’s stock (F, Financial) showed a 0.29% increase by the close of last Friday which may not seem too exciting for potential buyers, but it follows a slow and steady upward trend over the past year as the company works to recover its pre-recession position in the stock market.
Ford is giving us a lot to look forward to in the coming years and shows good signs of not only maintaining its steady growth but potentially speeding up the pace with some innovative new plans and some well-placed investments across their production line from improved technology and better equipment to hiring more workers and increasing factory capacity.
Looking Forward to the Next Few Years
Because the company has invested so much of its capital into improving and expanding its production, this slower than desirable growth in the value of its stock is to be expected. With $16 billion invested nationwide —primarily in the areas of development and manufacture — their reported profits are lower than they would otherwise be if they had not spent so much.
But this is something to be desired in a potential stock purchase. By strengthening their business’s foundations and investing in innovative new technologies, Ford is securely positioning itself for big profits and continued stable growth in the future.
What They Have Accomplished Already
They have already been able to add more than 75% of the 12,000 new hourly jobs they set a goal of adding by 2015. Three hundred and fifty of these new jobs are in their Stamping Plant in Buffalo, New York, where they have also invested $150 million to repair and improve the equipment and increase the output of the plant.
On the technology development front, Ford is ahead of the curve as it has been investing in green technology for the past 15 years. And those investments are already starting to pay off with its new EcoBoost engine which just surpassed the 2 million mark in production this past September and won the “International Engine of the Year” award for both 2012 and this year.
Ford has already seen more than a 30% gain in stocks this year alone and some analysts argue that it would not be unforeseeable for the company to show as much as a 50% increase in stock value over the 2014 and 2015 fiscal years.
Ford as a Global Market Leader
Sales in their home market of the U.S. — especially of the F-150 SVT Raptor — are growing. The new F-150 continues to outperform its competitor, the Chevy Silverado (GM, Financial), in the U.S. market. And their scheduled 2014 launch of a new Ford Fusion is poised to lead the market in mid-size automobiles.
Their markets in China and India are seeing record level growth this year as well with sales in China up an astonishing 55% over recorded profits last year (breaking their record for sales in the Chinese market). Due to this unprecedented growth, Ford is planning to launch many new cars in both the Chinese and Indian markets this coming year. So Ford and its stockholders can look forward to continued increased profits coming out of these regions.
What Potential Buyers Need to Watch Out For
Despite the predominantly good news coming out for Ford’s stock, there are are a few things potential buyers need to keep their eye on as the year comes to a close, the most important being Ford’s success — or relative lack thereof — in the European markets. Sales in that region of the globe are not growing as well as they are in other markets.
While we can’t generalize this market too much — sales in Germany, particularly, are indeed doing better than sales in other European countries like France — there is definitely a noticeable lag in the potential profits to be had in this region. And although one region will not have the ability to stop or reverse the steady upward trend of Ford’s stock, it can weigh it down and prevent it from reaching its full potential.
So buyers beware and keep a cautious look out for financial reports coming from the European market.
Aside from lower than desirable sales in Europe, there’s also the nationwide recall of the new Lincoln MKZ due to safety concerns regarding the braking mechanism. This recent recall could affect the company’s overall profits. However, the growing sales of their other, key models — namely the F-150 SVT Raptor — should more than make up for any loss resulting from this.
Another minor cause for concern is the relatively unexciting profits Ford earned in Black Friday sales. The official financial reports for November will not come out until this Tuesday; however, it is speculated that Ford did not manage to meet its expected increase in sales.
But, as the article in the link above argues, this is not necessarily a damaging result as the expected increase in Black Friday sales is calculated based on its success in the previous year. And Ford saw a healthy 12% increase in sales in November 2012 so even if they have only marginally surpassed their 2012 success, it will still be a good month for the company.
Conclusion
On that cautionary note, buyers can still feel reassured that these setbacks should be more than compensated for by Ford's commitment to investing in a stable future for its company. There is a lot to look forward to in the coming years and we have already seen nothing less than a consistent upward trend in the company’s stock value over the past two years.
Ford is well on its way to reaching its pre-recession peak and its emphasis on developing new technology and increasing production shows that it knows what it is doing and has a clear plan for continuing its stable growth.
Ford is giving us a lot to look forward to in the coming years and shows good signs of not only maintaining its steady growth but potentially speeding up the pace with some innovative new plans and some well-placed investments across their production line from improved technology and better equipment to hiring more workers and increasing factory capacity.
Looking Forward to the Next Few Years
Because the company has invested so much of its capital into improving and expanding its production, this slower than desirable growth in the value of its stock is to be expected. With $16 billion invested nationwide —primarily in the areas of development and manufacture — their reported profits are lower than they would otherwise be if they had not spent so much.
But this is something to be desired in a potential stock purchase. By strengthening their business’s foundations and investing in innovative new technologies, Ford is securely positioning itself for big profits and continued stable growth in the future.
What They Have Accomplished Already
They have already been able to add more than 75% of the 12,000 new hourly jobs they set a goal of adding by 2015. Three hundred and fifty of these new jobs are in their Stamping Plant in Buffalo, New York, where they have also invested $150 million to repair and improve the equipment and increase the output of the plant.
On the technology development front, Ford is ahead of the curve as it has been investing in green technology for the past 15 years. And those investments are already starting to pay off with its new EcoBoost engine which just surpassed the 2 million mark in production this past September and won the “International Engine of the Year” award for both 2012 and this year.
Ford has already seen more than a 30% gain in stocks this year alone and some analysts argue that it would not be unforeseeable for the company to show as much as a 50% increase in stock value over the 2014 and 2015 fiscal years.
Ford as a Global Market Leader
Sales in their home market of the U.S. — especially of the F-150 SVT Raptor — are growing. The new F-150 continues to outperform its competitor, the Chevy Silverado (GM, Financial), in the U.S. market. And their scheduled 2014 launch of a new Ford Fusion is poised to lead the market in mid-size automobiles.
Their markets in China and India are seeing record level growth this year as well with sales in China up an astonishing 55% over recorded profits last year (breaking their record for sales in the Chinese market). Due to this unprecedented growth, Ford is planning to launch many new cars in both the Chinese and Indian markets this coming year. So Ford and its stockholders can look forward to continued increased profits coming out of these regions.
What Potential Buyers Need to Watch Out For
Despite the predominantly good news coming out for Ford’s stock, there are are a few things potential buyers need to keep their eye on as the year comes to a close, the most important being Ford’s success — or relative lack thereof — in the European markets. Sales in that region of the globe are not growing as well as they are in other markets.
While we can’t generalize this market too much — sales in Germany, particularly, are indeed doing better than sales in other European countries like France — there is definitely a noticeable lag in the potential profits to be had in this region. And although one region will not have the ability to stop or reverse the steady upward trend of Ford’s stock, it can weigh it down and prevent it from reaching its full potential.
So buyers beware and keep a cautious look out for financial reports coming from the European market.
Aside from lower than desirable sales in Europe, there’s also the nationwide recall of the new Lincoln MKZ due to safety concerns regarding the braking mechanism. This recent recall could affect the company’s overall profits. However, the growing sales of their other, key models — namely the F-150 SVT Raptor — should more than make up for any loss resulting from this.
Another minor cause for concern is the relatively unexciting profits Ford earned in Black Friday sales. The official financial reports for November will not come out until this Tuesday; however, it is speculated that Ford did not manage to meet its expected increase in sales.
But, as the article in the link above argues, this is not necessarily a damaging result as the expected increase in Black Friday sales is calculated based on its success in the previous year. And Ford saw a healthy 12% increase in sales in November 2012 so even if they have only marginally surpassed their 2012 success, it will still be a good month for the company.
Conclusion
On that cautionary note, buyers can still feel reassured that these setbacks should be more than compensated for by Ford's commitment to investing in a stable future for its company. There is a lot to look forward to in the coming years and we have already seen nothing less than a consistent upward trend in the company’s stock value over the past two years.
Ford is well on its way to reaching its pre-recession peak and its emphasis on developing new technology and increasing production shows that it knows what it is doing and has a clear plan for continuing its stable growth.
