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HomeInvesting IdeasTop Growth Stock: Ford Motor Company (F) - 12.45

Top Growth Stock: Ford Motor Company (F) – 12.45

Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.

Growth Stock Analysis as of 02 March 2024

Top Growth Stock

NYSE: Ford Motor Company (F)

  • Ford Motor Company manufactures, distributes, and provides maintenance services for a variety of Ford trucks, commercial vehicles, vans, sport utility vehicles, and Lincoln luxury vehicles globally.
  • Ford’s recent hurdles involve supply chain disruptions, higher interest rates, and labor negotiations, yet the company’s restructuring plan and hybrid vehicle focus signal growth potential.
  • Ford Motor Company manufactures and markets automobiles under the Ford and Lincoln brands. Notably, Ford’s F-series truck has maintained its position as the best-selling vehicle in the U.S. for several decades.
  • This automaker aims to reduce capital investment in larger BEVs and concentrate on regions and product segments where it holds a dominant advantage, such as trucks and vans.
  • Investors of Ford who capitalized on F’s mid-January 2024 lows have reaped the rewards of its rebound, affirming the resilience of its previous trough in October/November 2023.
  • Management’s continued success in implementing cost-saving measures through industrial redesign has bolstered its ability to reach the targeted $2B in cost reduction, crucial for the company’s resilience during a recession.
  • Ford’s dividend, currently exceeding 5%, is projected to experience slight growth over time and stand to gain from share buybacks.

Shareholding Patterns of Ford Motor Company:

HolderSharesDate Reported% OutValue
Vanguard Group Inc339,898,517Dec 30, 20238.71%4,231,736,471
Blackrock Inc.280,877,926Dec 30, 20237.20%3,496,930,125
State Street Corporation173,925,221Dec 30, 20234.46%2,165,368,968
Newport Trust Company, LLC155,177,214Dec 30, 20233.98%1,931,956,284
Charles Schwab Investment Management, Inc.87,661,675Dec 30, 20232.25%1,091,387,837
Geode Capital Management, LLC75,798,698Dec 30, 20231.94%943,693,775
Fisher Asset Management, LLC59,152,154Dec 30, 20231.52%736,444,306
Morgan Stanley50,961,081Dec 30, 20231.31%634,465,448
Norges Bank Investment Management39,040,102Dec 30, 20231.00%486,049,262
Northern Trust Corporation36,605,708Dec 30, 20230.94%455,741,057

List of Brands under Ford Motor Company (F):
Ford Motor Company offers a diverse array of vehicles under the Ford brand globally. This list excludes other brands owned or previously owned by Ford, such as Lincoln, Mercury, Edsel, and Merkur.

What we think are pros of business:

  1. The global automotive industry is trending towards annual revenues of $3 trillion. Currently ranked 5th in revenues, Ford has the potential to ascend to 3rd place in overall sales as the market shifts towards electric vehicles over the next 3-10 years.
  2. Ford’s capacity to customize its electric vehicle strategies while maintaining dependence on highly lucrative internal combustion models is poised to offer significant advantages in the upcoming quarters.
  3. The Brand’s strong brand presence helped them dominate the Auto Industry market.
  4. In the fourth quarter of 2023, Ford sold 25,937 electric vehicles, marking a 24% increase from the third quarter. Throughout 2023, the company sold a total of 72,608 EVs, representing an 18% rise from 2022. This growth positioned Ford as the second top-selling EV brand after Tesla. In total, Ford sold nearly 2 million vehicles.
  5. Ford’s capacity to customize its electric vehicle strategies while maintaining dependence on highly lucrative internal combustion models is poised to offer significant advantages in the upcoming quarters.

What we think the risks are:

  1. Ford’s presence in the electric vehicle market does not match its longstanding legacy in the automotive industry.
  2. Ford stock is perceived as inexpensive with commendable profitability, yet its lackluster revenue and margin growth detract from its appeal as a long-term investment. Other companies in the market offer better prospects and opportunities.
  3. The company doesn’t have a guaranteed position as a leader in the electric vehicle market, and its financial standing doesn’t position it to secure such a role over the long term.
  4. Negative publicity, product recalls, or controversies can harm brand reputation and customer trust.
  5. Events like pandemics & geopolitical tensions can impact global supply chains and consumer behavior which leads to slowdown in business.

Fundamentals:

  • Market Cap: 49.47 Billion
  • Revenue: 176.19 Billion
  • 52 Week Range: 9.63 – 15.42
  • Dividend: 0.60 (4.82%)
  • EPS: 1.09
  • P/E Ratio: 11.39
  • Beta: 1.64

Technical for a long-term perspective:

– Stock price is consolidating and if markets corrects in 2024 then it will be very good opportunity to add these stocks at lower levels.
– You can start accumulating this stock from current levels because it has recently given a breakout of the trendline on daily time frame charts.
– If markets start falling this stock will also fall so you can keep your stoploss at $11.90 as a swing trade.
– And if you want to hold this trade for the long term then enter little on every dip.
– This company also provides dividend so you can also be able to generate the regular cashflow from this.
– RSI is trading at 55 levels and will try to hit 75-80 levels.

Entry = 12.45

Stop Loss = 9.50

Target = 25

Our Final Thought:

Ford’s Q4’23 earnings might beat expectations despite concerns over EV demand. Strong F-150 Lightning sales signal positive momentum. Low estimates provide Ford an opportunity to outperform. December’s sales report suggests a favorable EV market trend, with F-150 Lightning sales up by 55% in FY 2023. Investors need not fret about Ford’s EV trajectory. As we look at the technicals this stock is trading at very lower levels and price may fall further with the negative market sentiment but this will be the top performing stock after the market recovery and will heads towards 25 levels. This stock is poised to generate market-beating total returns across most 3- and 5-year rolling timeframes for the next decade or more.

Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and  your own due diligence before investing.

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