Ford Motor (F)

He owns GM instead. The whole auto sector is changing with the electrification of cars. Within 5 years, the carmakers will be making e-cars with batteries. Total units sold in North American are around 12-13 million units sold vs. the normal 17.5 million, because of the pandemic recession. He prefers GM. The carmakers have rationalized costs to break even at these low production levels.

Short-term, it can do well. F150 truck is its most profitable, strongly correlated to single home build starts. Problem is, single family home starts are going to peak. He'd go to broader exposure of semis in vehicles, such as Texas Instruments or Taiwan Semiconductor.

F vs. GM Every company is going to have to disrupt to be in EV. Won't be easy, as Tesla is out front and will be hard to challenge. Uptick in demand for vehicles, so they should participate in the recovery. Both are inexpensive. He'd choose GM.

The global auto outlook is very good. For many months, nobody was buying or making cars, so now there's pent-up demand. Ford is high-risk, though. Magna is safer in this space. If you're a risk-taker, Ford is fine.

Ford vs. GE - Two old industrial giants that are struggling. Great companies, now losers racing down to $10/share. But each are showing promise and hope. He likes both stocks now in the single digits, though they are vastly different. Both Ford and GE will return to double-digits, though he gives the edge to Ford. Ford suffered from chronic mismanagement. They were only the big car company that didn't accept bailout money in the great recession; they should have. Growth and margins shrink after the recession and kept shrinking. Then for years, Ford made the wrong kind of cars (small when Americans wanted large). Also, their international business was a mess, never finding a strategy for China and encountering endless problems with South America. In March, Ford borrowed $15 billion and suspended its dividend then reported a giant loss in April. Now, it's turning around; Covid has encouraged car sales as people are afraid to take mass transit. The new CEO is making the right moves. It just reported its best quarter for pick-up trucks since 2005. Ford is a clearer value play than GE.

Like the Google of the auto world, in that they have one big product, the Ford F-150. Unemployment data in the US, around 10%, it's a challenge for them to buy an expensive vehicle. Challenged going forward. Dividend suspended. He's not interested.