Ford Motor (F)

Of all the US awful companies, this is his favourite. Not trading at a huge multiple. About a 3.7% dividend yield. Have some great products coming out. Expects there will be better growth out of them with more innovative and better products. The strong US$ hurts them a little bit.

Interest rates are very low, which is a huge factor when making car purchases. Car buying has increased. It really comes down to how many more cars they can sell. It has been a good run so far. From a company point of view, can they earn that cost of capital back? For the next 6-7 months, it would be an okay investment, but he wouldn’t be loading up the truck on it as of yet.

Brought out 28 new models last year, which kind of hurt in the short term, because they had to shut down production. F150, their huge driver, had been remodelled and reengineered which cost them in 2014. Going forward, this is a good Hold. There is good opportunity for this.

To him, this is the best in the automobile space. The new F150 is getting a lot of very good reviews and is the best selling vehicle globally. Total car shipments worldwide are running somewhere around 60 million with 17 million of that in North America. There are lots of opportunities there, but also lots of worries. They have had a tough time in Europe. From an investment standpoint, that creates opportunity. He thinks there is some promise this year and in the next few years for Ford.

All of the American car industry companies had tremendous sales in January, and the best thing is that they had sales on their highest margin products. He thinks that the Renaissance of the American car industry is nowhere near its peak. Everybody should own one of these companies.

Feels the automotive industry has a ways to go. They are at a run rate of about 16-16.5 million units, which he feels could probably grow to 18-18.5 million. The bigger story is in Europe and what their European operations are doing. Have gone from losing $1 billion a year, a couple of years ago, to making some headway. However, recently they got some negative headlines out of Europe. At this price, he wouldn’t have a problem buying this company. Thinks it is probably the best of the automakers and has some upward movement in it. You can probably do well in the next few years.

Doesn’t own it today and hasn’t for 12 months. The price is quite depressed. It has suffered in that they have a lot of business overseas where the economy was not as strong. He would prefer North American centric companies like MRE-T or MG-T. If you could pick it up at $13 a share it does not look too bad, however [as caller did, so hold].

Anybody who has significant Europe exposure is facing big headwinds. He is sitting on the 1 yard line. He prefers parts makers to manufacturers.

Should have bought over GM-N. They lowered earnings this year so that is why it has not done well. But the sun is shining and hay is being made. There is still more upside for these names. They rolled out more models this year than ever before so maybe the next two years will be better than ever.

A Hold to a Weak Buy. Likes the outlook. Global auto sales continue to move forward over the coming years. North America is continuing through a very good rebound. Europe is kind of bumping along the bottom, and emerging markets continue to move forward with their auto consumption. His preference would be the auto parts manufacturers, which tends to be more stable dependable businesses. OEMs can make a lot of money from a leverage perspective, but are much more economically sensitive.

A big downgrade today. Auto sales are going up, but they are profitless sales. The growth in auto sales from here is profitless. Some of the auto stocks have flat lined.

(A Top Pick Nov 22/13. Up 1.85%.) Still thinks this is going to go forward. They have done all the right things. Didn’t take any TARP money and didn’t go into bankruptcy. Have 20 new models coming out next year, which they are going to take to Africa and other places. Balance sheet has been hugely improved.

(Top Pick Jul. 11/13, Up 8.45%) He focused in the last while on parts. It is a big deal that Ford turned around Europe. This is a great business with 8-9% margins. No problem owning the stock. Consumers have more free cash flow than in over 10 years because interest rates have come down and inflation in food has come down. Financing is readily available.

In a unique position to, unfortunately, capitalize on General Motors (GM-N) woes. Valuation is very reasonable. There is still a lot of debt, which is his one big concern. If we got into another down cycle, sooner than expected, then that that could be a huge overhang on the stock. Looking at this one.

This has a 5% upside to his model price. The company’s doing everything right, but where is the value. You want to buy large-cap stocks when it is “ugly healthcare” for them.