Is Ford (F) Stock a Good Buy?
Ford (F) stock left a bad taste in my mouth when I finally sold off my stake last year. I was loyal to Ford Motors even as the stock continued to fall while the Dow Jones and S & P 500 enjoyed a record 11 year bull run.
What’s wrong with Ford? Lots of things. Too many car models. Lack of electric vehicles. Useless hybrid vehicles. and even finally suspending the dividend in event of the Coronavirus.
Now, Ford stock trades at a ridiculous low of just around $4. With no dividend to provide income to shareholders, I don’t see any reason to own Ford stock.
Ford Missed the Electric Vehicle Boom
Ford still sells America’s best selling vehicle, the F-Series Truck, but how in the heck did they miss the EV movement? Ford has been around for 100+ years while Tesla came in and took over 50% of all electric car sales in America. Ford could have easily gained a big market share if they were innovators.
The truth is Tesla is a customer-focused company while Ford is a competitor-focused company. Ford only made the push into EV cars after Tesla started gaining traction. How did they miss the new trend away from smelly, loud, noisy and expensive to fix gas gusslers into clean, smooth, peaceful sounding electric vehicles?
Hmmpff.
Ford Does Have Cash…Lots of It!
The good news is Ford currently holds $34 billion in cash (as of 12/30/19) so they should be okay until the COVID-19 lockdown ends. Ford has always stashed away cash in case of an emergency. That’s a positive sign for an otherwise value destroying company.
But with all their facotires closed in North America, Ford will go through their stash as the COVID-19 outbreak lingers on. What will be left once the dust settles? Perhaps a struggling automaker stock with less cash, no dividend, and declining sales. Not good.
I Like Ford As an American Icon but I Don’t Like the Stock
The truth is I still like Ford as a longstanding American company. My first car was a Ford. Ford will always have a special place in my heart but I must change with the times. Ford is no longer a good stock to own until they make a lot of changes. Let’s hope they bring back the dividend and start making cars the next generation wants to drive.
