Ford Motor (F)

Very positive environment for the auto industry globally. In North America you have a very old and aging fleet of domestic cars. Replacement factor is very high. There is a bit of inventory issue with the whole market, which is being worked off, but that is why it has been soft in the last few months. This is a buying opportunity.

Thinks it is fine. If you rate the N.A. companies, then go for GM-N who has outdone Ford. OEMs are running flat out right now. They are at a record high. A lot of younger buyers are now buying new cars. No problem with Ford specifically.

(Market Call Minute) Auto sector is doing well in the US and Ford is one of the bigger beneficiaries.

Auto sector is a good sector overall. However, he much prefers investing in the auto parts companies where you are much better off being with. (See Top Picks.)

Going through the 2008 experience, this company suffered because they were the only North American car company that didn’t get bailed out. Paying their debt off with pretty robust cash flow right now. They are up to about 16 million units now. This is a cyclical company. When we start to see the economy roll over, we will start to see car sales roll over. They are still not hitting on all cylinders in Europe, which is an opportunity for them. Good stable place, but wouldn’t bet the farm on it. Doesn’t see a lot of upside left in it.

They didn’t take any government money. The debt side has been coming down. The pension plan is being looked after. These were the liabilities going forward in 2008. Sales have really improved. Doing well in China. Have a whole new spectrum of new automobiles. Ford credit (the only automobile company that kept its credit line) is still in place and could be a real money maker going forward.

Doesn’t own anything in the auto sector but his view on it overall is positive. Feels you are getting a good refresh rate of new automobiles, particularly in the US. This company has been reporting good earnings for the last few quarters.

This has had a great run since the last year. Lately, the chart has been showing a basing pattern which are usually patterns that we would break out from. The oscillator sentiments are showing it has room to grow. The next resistant point would be around $19.

Likes the company and sector generally. Have done a good job of simplifying their models. This is a sensitive cyclical stock so it will drop on the first sign of weakness.

Thinks the big 3 can continue to work. Very cyclical businesses, but credit is very easy in this space. Thinks that is fuelling what is going on. There has been some product innovation, repairing of the balance sheet and better sentiment. Mildly positive on auto stocks as a whole.

Feels there is continued upside on this, both on domestic and international fronts. One of the auto companies that did not take any tarp money, which speaks quite highly of their management and their ability to be able to execute and handle their financial house. With the low interest-rate environment, there is still going to be opportunity for the consumer market to upgrade to newer models. He can see upside in names like this. Technically, this is in a band and when it touches the bottom side of the band, that is when you make an entry.

(A Top Pick Nov 22/12. Up 56.45%.) Doesn’t think the run is over for this company. There is a tremendous amount of replacement that needs to occur in North America and Europe. What is attractive is that North America is working really well but Europe has yet to occur.

Likes this one. A beneficiary of improvement in housing in the US. Their pickup trucks are big, big sellers. There is a big replacement cycle in cars as the average age is about 11.9 years. Europe is getting a little bit better and they have a significant presence there.

If you own, she would take some profits. Even though the auto industry in the US is recovering, it is a cyclical. You have to remember that the Japanese manufacturers, who have the benefit of a depreciating yen, could get more price aggressive.

Believes the average car in the US is 12 years old so there is a cycle where people will be buying and leasing new cars so this looks pretty interesting. Valuation is pretty fair. You are paying 10 or 11 times earnings for a 9%-10% earnings growth rate.