COMPANY DESCRIPTION

Ford Motor Company (Ford or "the company") is one of the largest automotive manufacturers in the world. The company manufactures and distributes automobiles across six continents. It also provides financial services through Ford Motor Credit. The company's key automotive vehicle brands include Ford and Lincoln. Ford primarily operates in North America, Europe, and South America. It is headquartered in Dearborn, Michigan.

 

ECONOMIC MOAT

In our opinion Ford does not have a moat.  Ford’s success relies on excellent execution, which they have been able to deliver. Vehicle manufacturing is a very capital-intensive business, but barriers to entry are not as high as in the past. 

 

OUTLOOK

Ford closed out 2014 on a soft note.  In 2015 - 15 vehicles are set to launch this year. Initial response to Ford's all-new F-150 has been favorable. The pickup, which features significantly increased aluminum content, made its U.S. debut in December. The truck will be rolled out to 90 markets this year. Ford shares retain their long-term appeal.  In our opinion over the next decade the stock offers above-average appreciation potential and a comparatively sizable dividend yield.

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STRENGTHS

  • Strong market position across product portfolio

  • Intense focus on sustainability and fuel efficient technologies

  • Robust research and development capabilities 

WEAKNESSES

  • Frequent product recalls

  • Decline of unit sales in certain countries 

THREATS

  • Intense competition and pricing pressure

  • Currency fluctuations and trade policy risks for the South American operations 

OPPORTUNITIES

  • New product launches

  • Increased focus on emerging markets

  • Recovery of automotive market in the US 

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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