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Good luck with that....$16.25 would make matters worse IMHO as now you would be below that cloud, the edges of which would be resistances.
today it has bounced off that upper edge of the cloud which when below the share price is a support...hard to say if it won't challenge that support again but I would think it will. Personally I would not think a stock price completely below a cloud (at least a green cloud is better that a red one) as being a good thing.
But that is me....good luck
Can you help answer these questions from other members on NexusFi?
Aug. 8, 2014 2:13 PM ET | About: Ford Motor Company (F)
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary
Ford continues to reduce expenses, and has brought debt down to manageable levels.
Ford's growth will largely depend on overseas sales.
Ford's dividends have risen in recent years, and higher payouts are to be expected.
With a lot of the big names on the market overbought these days, finding decent value is tricky, let alone a value play that offers a nice dividend yield. Yet after years of struggling with debt and the economic downturn, Ford Motor Company (NYSE:F) has quietly come out the other end offering both.
The company itself will need no introduction, and is one of the most enduring brands in American history. The focus, rather, will be on what Ford looks like in the 21st century, what its recent earnings statements tell us, and what we can expect from them in the future.
Ford and Ford Motor Credit
The majority of Ford's revenue, naturally, comes from the sale of vehicles. That's always been true and it will always be true, and Ford's position in the US market has remained roughly flat, just north of 15% market share, over the past several years.
There's another story on Ford's books though, and that is their wholly-owned subsidiary, Ford Motor Credit Company LLC, which offers financial services. Primarily, of course, that means financing the cars themselves.
Whether traditional retail deals or leases, Ford Motor Credit has done very well for itself, and while the automotive sector itself has only about a 3.8% operating margin as of FY2013, Ford Motor Credit has an impressive 22.1% operating margin. They may only be 5% of the company's revenue, but Ford Motor Credit is about 24% of the company's pre-tax income.
The best news is that while US sales remain flat, the credit segment is growing a bit. They accounted for 36% of all US Ford retail financing in FY2011, 38% by FY2012, and finally 40% in FY2013. It's always nice when your best margin business is also among your fastest growing.
The US car market
Any discussion of the US car market is going to have to tackle the elephant in the room: even as overall economic metrics improve, car sales are not back to pre-recession levels.
Recent economic troubles have had a lasting impact on younger Americans, and they are loathe to look into buying second cars the way previous generations used to. Assuming that parsimony continues, the era of the multi-car household could be over, and the US car market may never fully recover. Unless Ford can increase its market share, and so far they're not having much luck, their US revenues will probably not grow appreciably.
Asia and Africa
It may sound funny when we're talking about a company as traditionally US-centric as Ford, but growth on the automotive sales side of the business is likely going to come from overseas. In this regard, Ford is well-positioned.
Unlike it's relatively flat market share in saturated markets like the US, Canada, and Europe, Ford has managed to grow its marketshare in markets that are themselves growing. They went from a 8.4% share in South Africa in 2011 to 10.3% today, and in China, the largest growth market of all, they started at a paltry 2.7% in 2011, got to 4.1% in 2013, and kept growing to 4.6% as of Q2 of 2014.
China, Africa, and the ASEAN nations are all going to be major growth markets for the worldwide automobile industry for the foreseeable future, and Ford has shown some encouraging early success in increasing their presence there.
Managing the debt
The story of Ford over the last decade-plus has been that of their sizeable debt, and ongoing efforts to get it under control. In this regard again, we have good news.
Consistently strong earnings, including $7.1 billion in FY2013 and an estimate of over $5 billion in FY2014 have gotten the company's debt back down to manageable levels, and the gap between total assets and total debt is slowly growing again.
Automotive company debt is not the money pit it once was, and Ford's bond offerings are trading at significantly lower yields than their initial coupon percentages, reflecting the growing confidence in their ability to keep handling payments.
Recent years' earnings have been offset by the separation costs associated with reducing the company's payrolls, which in the long-run will allow them to keep costs down and keep profits trending upward. The FY2014 price/earnings ratio is about 12.5, and the FY2015 ratio is even lower at 8.7. That's cheap, and it's not the end of the good news.
Growing dividends
In late 2006, Ford had to suspend their dividend to manage their debt and expense problems. Having weathered that storm, they resumed paying $0.05 per share quarterly dividends in 2012.
Things have been going well since then, and Ford bumped the dividend up to $0.10 per share quarterly in 2013, and $0.125 quarterly in 2014.
That's already the highest dividend Ford has paid since 2001, and earnings can easily support a continued trend upward. The current yield is already a respectable 3.0%, and if they keep increasing it intermittently, which they can certainly afford to, it will enhance shareholder value considerably.
Conclusion
Ford Motor Company has turned the corner since 2011, and continues to refine itself as both a very profitable company and a good dividend payer.
Whether you're a value investor looking for a reliable earner or just looking for a big company with a sustainable, growing dividend yield, Ford definitely deserves to be on your list.
This is what fascinates me about charting...see how that share price bounced off of that upper edge of the cloud back on Aug 8 when we were discussing if the price would fall to $16.25.
But now it has closed below the support of that edge of the green cloud.
Looking at this chart it now looks a bit more bearish than before
note the near completion of a bearish cross of the DI+/- at the bottom chart, the CMF is not showing much improvement and the RSI might be starting a negative slope....not critical as being a bear yet but the cub is growing
Shares of Ford (NYSE:F) ended the day 7.5% lower on a late selling flurry after the automaker forecast a loss of $1B in South America due to currency issues and issued weak guidance for Europe as well.
Pre-tax profit for 2014 is pegged at $6B by the company.
The comments from Ford management came during an Investor Day Conference
When you look at the recalls and troubles of the Chevy product line it is comforting to see this decline in Ford's problems.
and it is not just Daniel Miller saying that this is an over reaction but also by Kurumi Fukushima from The Street saying a similar but different viewpoint...again fairly hard fundamental data
As far as TA goes for Ford here is my take on things
You recall in my last post on Ford I said that the charts were slightly bearish at the time but growing well the bear is fully grown now
this chart is remarkable in its display of the drop.... The previous decline was showing a possibility of a bottom but that ended immediately today...the BBWidth has renewed vigor and the MACD is accelerated in its slope ...the Slow Sto is stuck firmly in the mud.
However, the closing price is far below the lower Bollinger band .... so I would expect a pullback in a day or so....somewhere to about $15.50....but I doubt this would be an indication of problems in the share price are over.
this chart shows the problem were long in coming and all parameters are VERY Bearish...that is why I doubt the pullback when it comes will be lasting.
if you look back at my previous post and the Ichimoku chart I posted there the share price was flirting with the outer edge of the green cloud....no flirting anymore this stock has plunged far below and everything is full on bear.
Conclusion
I do think that Ford will recover from this...the articles I showed here are quite positive, but that is long term, right now investors are running scared it seems with corrections happening everywhere. I Canada we have been on the decline for months now....America is just entering this correction.
Long term the stock is probably good and will most likely get a shot in the arm with its Q3 report but it will be months before this turns around IMHO....And THEN this stock will be a buy...it is a stock worth watching IMHO
• Goldman Sachs downgrades Ford (NYSE:F) even though shares have slipped more than 20% during the past three months.
• The firm cuts Ford to Neutral from Buy with a $17 price target, lowered from $21, noting that the stock looks cheap but might be "dead money in the near-term" as it now expects Y/Y EPS declines until Q2 2015 since the ramp up in truck production looks like it will happen more slowly than expected, with the F-150 not producing at full capacity until H2 2015.
• Also, the firm foresees less cash deployable to shareholders given lower EBITDA and higher capex spending relative to previous forecasts, plus annual pension contributions of $1.5B over the next two years.
• GM is removed from Goldman's Americas Conviction List but remain Buy-listed, as the firm sees some pressure on North American margins next year.
