Ford Motor (F-N)

Prefers GM (higher margins) than Ford.
Electrification program is better.
Pending agreement with UAW good for business. 

It can't afford to pay expensive labour if it wants to pivot to EVS and compete with Tesla. Unfair but that's the reality. Ford can either outsource or give in and lose some factories.

Has been cheap for 20 years, and can't get out of its own way. PE around 5-6x. Never any growth rate. Can trade it. If you want something exciting on PEG, buy TSLA when it's on its back.

Wells Fargo projects that a strike would cost GM $2.7 billion and Ford $2.4 billion of adjusted EBIT a month. That said, he's not that worried and is not a risk to sell the carmakers. A strike is a one-off event, and the stock market cares only about the future. Also, Biden won't let a strike drag on; cars are a critical industry. Third, these stocks have already come down to absorb a stock. That said, if the strike leads to much higher wages, that would hurt these stocks. Don't rush in to buy these stocks.

He's not happy. He hfears a strike and their EV business is losing too much money. If you already own this, hold. Managers did recently guide numbers up.

Unhappy to see Ford's price cuts today. Can Ford still meet its earnings estimates? It could lead to more price cuts by other makers, but it's a sign that the bloom is off the EV rose, which had to happen.

Should be eligible for the credit. More upside to come.

They had production hiccups earlier this year, but last week they revealed EV sales were up 35% in June. EVs make up a small part of their overall sales though. Traditional gas-car sales are not reflecting recession fears. His favourite car stock. Excellent PE.

You don't need to choose between Tesla and Ford. This isn't an either-or question. He likes Ford for its dividend yield and its agreement to use Tesla's charging network for Ford's EVs. This let shares rise 3 points since late May. Their traditional gas-powered cars spew cash and fuel their EVs.

Been under pressure in recent months, but has found support at current levels. Not bad. However, a recession will decrease car sales. If you buy now, set a 5-year target, and buying now is reasonable.

If you really have your heart set on it, wait, given where we are in the economic cycle and the potential of a recession. Recession could be shallow, could be deep. Higher interest rates dramatically impact the purchase of vehicles. Has to reinvent itself. Any money it makes has to be reinvested in the business to prepare for selling EVs, so it won't have any free cashflow. He'd prefer something more durable and cashflow-focused over the long term.

Owns neither. Cheap for a reason, until they're no longer in combustion engines and just compete in EVs with TSLA, which will be hard. 

Big OEM companies are in a very difficult situation. Legacy businesses trying to move to EV. But the combustion business is supporting the EV business. Being tied into dealerships make things difficult too. With TSLA, you order online and then go pick it up, like buying an iPhone.

Combustion side involves so many more parts than EV, so layoffs on the table. More things can go wrong with combustion engines than EV. 

It trades at a low PE, but carries high risk. We're headed for a cyclical downturn in car sales. Car loan rates have jumped from 5.6% to 9% in the past year. Also, few analysts are confident that it can transition easily from gas cars to electric or how to balance the two types. Pure-play Tesla has an edge. Also, the company is heavily unionized. Last year, it suffered supply chain shortages and it had troubling warranty issues. It's a value trap. It's a value trap. All that said, he expects this to be a breakout quarter for Ford when they beat their numbers in their gas-car business; this is tremendous earnings leverage. Also, Tesla has scaled back its pick-up truck business a lot while Ford has raised prices for its F-150 twice but still sells. And if the Fed manages a soft landing, this stock will take off.