John Linehan, portfolio manager of the the T Rowe Price Equity Income Fund (Trades, Portfolio), added to his Ford Motor Co. (F, Financial) stake during the first quarter, buying 2.5 million shares.
The trade had a 0.13% impact on the portfolio.
He now owns 7.35 million total shares.
The company was founded by Henry Ford in 1903. Ford was an American industrialist and created the assembly line technique for mass production. Ford began its long history with 12 investors and 1,000 shares.
The company faced adversity in its early years. It spent almost all of its $28,000 cash investment by the time it sold the first Model A on July 23, 1903.
Fast forward over a hundred years later and Ford has become one of the world’s largest automotive companies.
Its business includes designing, manufacturing, marketing and servicing a full line of cars, trucks and sport utility vehicles (SUVs), as well as Lincoln luxury vehicles.
Currently, the company is suffering from slumping sales in China and an unfavorable exchange-rate impact in Europe due to Brexit. It also faces a tougher market in the U.S., where new car demand is cooling after seven years of uninterrupted growth.
In its first-quarter 2017 results, Ford reported a 35% profit decline compared to its first-quarter 2016 results.
Although the company is currently facing adversity, it has shown resilience in dealing with setbacks and overcoming obstacles throughout the course of its 114-year history.
Ford has a market cap of $46.31 billion, an enterprise value of $150.47, a price-earnings (P/E) ratio of 10.05, a price-book (P/B) ratio of 1.54 and a price-sales (P/S) ratio of 0.30.
According to GuruFocus, the company has a 4 of 10 financial strength rating with a cash-debt ratio of 0.27 and an equity-asset ratio of 0.12. The Piotroski F-Score of 5 indicates the company's financial situation is typical for a stable company.
Ford has a 6 of 10 profitability and growth rating. It has an operating margin of 2.80%, a net margin of 3.03%, a return on assets (ROA) of 1.96% and a three-year revenue growth rate of 2.20%.
Ford has several positive idicators that investors should pay attention to:
- The dividend yield of 5.27% is higher than 94% of the 1,322 companies in the Global Auto Manufacturers industry.
- The company has a diversified portfolio of automotive vehicles with 114 years of operating experience.
- The P/B ratio of 1.55 is close to the company's 10-year low of 1.42.
- The P/S ratio of 0.30 is close to its five-year low of 0.28.
The company is undervalued according to the Peter Lynch Chart below.
Disclosure: Author does not own any shares of this company.
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