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BenHouston said: "What do you guys think about Ford?
Around 8.50 a share, they have quite a bit of long term debt. However they are a major car company which own many others such as lincon, jaguar, landrover, ect...They have hybrid cars in the making.
Umm okay so lets do some math:
Enterprise Value = 156.07B
Market Cap = 15.70B
Book Value Per Share (mrq): 6.577
I am not sure what this equation does but it was posted by lance on one thread I dont even remember which:
(15.7 Billion * 6.577)/156.07 Billion = .66
Now Lance you once said if this number is less then 1 it is potentialy a good buy?
Only thing I am not clear on is book value is less than what its trading at of 8.50 so how can this company possibly be undervalued, I dont think it is?
Anyways I hope someone can help a confused investor :)"
HappyHarry said: "I don't like Ford at all. Too many pension obligations, too low of a profit margin, and too much competition."
SHIFTY101EASY said: "yeah....i dont know much but i knowto stay away from car companies at the moment. especially american ones. GM is on its last leg...of course it will never go under...but still...its not doin well.
if i was gonna buy something from ford, it would be a Mustang GT or a Ford GT (supercar). Probably not stock."
LanceJ said: "[QUOTE=BenHouston]
Now Lance you once said if this number is less then 1 it is potentialy a good buy?[/QUOTE]
No. You don't multiply the market cap by the book value per share, you multiply by the shares outstanding, then you compare that to the Enterprise Value.
Best not to throw out formulas that are incorrect or you are not sure about because the risk is higher that you will draw an incorrect conclusion.
I agree with the comments here, car companies are dangerous at the moment. Toyota was a shining star in a sea of darkness until they had massive recalls last week that fed into the avoidance of car companies by investors. I still think Toyota has the most potential going forward as they had excellent earnings in September while everyone else fell, and further, they will be releasing a hybrid version of their most popular selling car the Camry in spring of 2006. Ford is way behind in bringing out hybrid cars, they focused mostly on SUVs. That is why they got hit so hard in September because their SUV sales have dropped way off with the rising price of gas. As gas continues to rise and become prohibitively expense, hybrid cars will completely dominate as we are already seeing. Toyota is 2 - 3 years ahead of any other automotive company as they put massive amounts of research and development expense into hybrids years ago. They didn't follow the industry trend of bigger and bigger SUVs like the other automotive manufactures have been doing the last 10 years.
Further, Toyota is traded on the Nikkei which is doing well compared to the U.S. markets. And finally, Toyota is valued mostly in yen so as the dollar rises against the yen, the currency conversion favors Toyota.
If you must venture into the dangerous auto industry, Toyota may be your lower risk bet at the moment. Just make sure you use stops on all your trades in this market."
HappyHarry said: "Weak North American [url=http://biz.yahoo.com/ap/051020/earns_ford.html?.v=9]results[/url] causes Ford to lose $284,000,000.00 in the last 3 months.
I reckon just about NOBODY wants SUVs and trucks right now."
SHIFTY101EASY said: "they have probably one of the most popular, if not most popular CAR out at the moment though....2006 Mustang. You still have to special order GT's (V8's) from the factory. They cant make them fast enough to keep up with demand.
the estimated 25 MPG is a great thing to package along with everything that comes with a Mustang. They need more cars with this success to even be successful since their trucks and SUV's sales are going to be falling out of the sky......"
bennettbike said: "I was actually looking at ford 2 months ago, not anything spectacular.
Either one of two things will happen with the american car industry.
American can companies will slowly convert from there large gas guzzlers and head to smaller 4 cycle engines and hybirds like other ricer companies.
Until they get 38 mpg like my eclipse i dont care to invest in them
or...
The price of gas will go back down and people will drive SUV's again (highly doubt it)"
bennettbike said: "[B]My personal reason not to buy ford is below in bold.[/B]
Ford Motor plans for energy-poor future
Cooler Heads newsletter
By Iain Murray
October 13, 2004
Ford Motor Company appears to be making plans to join companies that look forward to increasing constraints on hydrocarbon energy use as a “business opportunity.”
According to the New York Times (Oct. 4), “Ford's goal, according to its own internal projections, would require an improvement of about 80 percent in the fuel economy of its cars and trucks by 2030, according to people who have been informed of the plan. The goal was laid out by the company's chairman, William Clay Ford Jr., and other executives at a meeting on August 3 at their headquarters in Dearborn, Mich.”
The Times suggests that Ford has based its strategy on computer models of carbon emissions. [B] “The company is studying long-range product-development strategies to reach its goal,” the report says, “and has not yet established shorter-range targets.[/B] Among those strategies could be more reliance on hybrid technology or other advances, like cleaner diesel engines and hydrogen fuel cells.”
Ford’s strategy has already won plaudits from its usual foes in the environmentalist movement. Daniel Becker of the Sierra Club told the Times, “This is a stunning change of direction for Ford, whose emissions are greater than all of Mexico…. This really is a better idea. We will continue to work with them to ensure that they implement this commitment.”
There are signs that the new direction was the result of alarmist pressure. In May, commenting on the release of the scientifically absurd The Day After Tomorrow, Mr. Ford said, “If you look at where society is headed, whether it's the Kyoto compact, whether it's the Hollywood movie that's coming out this summer on global warming, all of those things will truly have an impact on the debate…. I don't want Ford to be caught unaware or for us to be always saying, ‘No, we can't do something.’”"
HappyHarry said: "All they plan on doing is more layoffs, etc. They don't have many innovative ideas."
SHIFTY101EASY said: "apparently by next year a group of their cars will be able to run off ethanol as well as gas.
Ethanol = Alcohol = cheaper i would assume....?"
SHIFTY101EASY said: "you can make alcohol out of many things...corn...grapes...wheats..etc i believe, correct? since we could MAKE the fuel instead of pay people to dig it up and sell it to us...wouldnt this be at least a band-aid to the fuel crisis if it were to be put into wider spread use?"
HappyHarry said: "Ethanol is a definite potential winner. You can make it our corn, which is plentiful, so it has some uses as alternative fuel."
bennettbike said: "here is why i think hybird will kill ethenol for the next 10 years.
hybird engines are a great new technology and we still use GAS to fuel the. SO our GAS stations can still exist without any change.
Ethenol would need some sort of new age fuel pump costing Ca-Billions to install all over, assuming the gas stations want to install these new pumps,
ethenol would be the better choice though in my opinion."
AlfredSokol said: "Almost all of this will depend on politicians. In the midwest states, politicians are pushing for ethanol-friendly legislation, because it could be a big boost for corn farmers.
Whatever the plans are for alternative fuels, I'm pretty sure the public is ready to make a change."
SHIFTY101EASY said: "yeah, ethanol sounds fantastic. i also hear gasoline engines can be modified without great effort to run on ethanol as well...I know a friend of my who got his truck to run on it.
the small farmer might have a chance to survive if it becomes widespread...
also....since we have been acting like a kickstand holding up these shakey middle eastern countries by having little choice but to buy their gas and in turn supporting them finacially, it would be relatively easy to just drop them on their asses in the coming years and im sure in some way by doing that it would increase self-dependancy, increase world dependacy on us when after time because much of our country is agicultural (ethanol making), and also may help to hamper terrorist funding and what not."
bennettbike said: "[QUOTE=SHIFTY101EASY]apparently by next year a group of their cars will be able to run off ethanol as well as gas.
Ethanol = Alcohol = cheaper i would assume....?[/QUOTE]
good call alfred, pple probly are willing to make a change from gas all together. but im still sticking with the next 6-10 years is the following...
I say hybird will rule this new wave of the future because noone has to replace the pumps, and the refineries suplying the fuel dont have to change"
SHIFTY101EASY said: "if they can have a slow influx of additional ethanol pumps, like modify one pump at each station to ethanol then two...then three...etc etc... over a period of years...it could grow into the "mainstream"...very unrealistic i know...but it would be cool!"
rotorite86 said: "Ford is still in dire straits. Selling Hertz showed this. A few months ago I took a short on GM and Ford, and went long on Toyota. The result? Well you can guess it, Toyota has gone up quite a bit, and GM and Ford made me money also.
I like this ethanol and alcohol thing you guys have brought up, but I think that is extremely long term. In two years it still won't be mainstream. Toyota can't even keep up with its Prius orders right now. Ford and GM don't have a Hybrid on the market right now, and I think everyone is waiting for them to release one."
bennettbike said: "if the technology starts developing i guess you could get into it really early.
deff. be cool if it went mainstream though, ide make my own gas"
poldo said: "[QUOTE=HappyHarry]All they plan on doing is more layoffs, etc. They don't have many innovative ideas.[/QUOTE]
Yup.. that's exactly what sets apart the japanese companies,
from the US car companies not only Ford.
Toyota and Honda for example have been in the european market for ages so they know how to produce economical yet reliable veichles europe have had much higher gas prices for many years
so it is only logical that the car maker with the best background is succeeding ..
however I think of all the US car makers Ford is the company with the better prospects for Hybrid veichles but also the least likely to come up with some breakthrough model to boost sales and they have proven to be lacking creativity so it is really a big exclamation point , can they make it ? I think to do that they need a change in the upper managment"
SHIFTY101EASY said: "for has a hybird suv called the "escape" i believe. gm has nothing as of yet but are supposidely developing one."