Ford Motor (F-N)

They have warranty problems that make their earnings a black hole. He prefers GM, despite their weak dividend.

Owns GM instead. Ford lacks the cash of GM, among other metrics, and lag GM in this sector.

Ford and GM have some of the lowest PEs around (7.3x and 4.3x) vs. the 22x S&P average. Ford pays a 6.2% dividend yield, while GM has a huge buyback plan. Incredibly cheap--until the tariffs started. Remember: the car-makers were a huge reason why Trump used tariffs in his first term which lead to the USMCA trade deal. But now Trump wants to take away the qualities that made US cars competitive and affordable. Today, the car-makers got a one-month reprieve from Trump's tariffs and shares jumped. But if the car-makers wind up paying these tariffs, are we okay with the U.S. replacing cheap Mexican labour with expensive U.S. union labour? That's why these stocks are so cheap--their earnings are in grave danger. Value traps. A 25% tariff on Mexican imports is a subsidy for foreign car companies like Kia.

F has seen negative momentum over the past few years, falling from a high of $25 in early 2022 to $9 today. It pays a good yield of 8.4%, but this is mostly high due to its falling stock price. Sales are expected to be mostly flat over the next few years, and earnings are expected to fall in the near term, with some growth thereafter. The auto industry was at one time a rising and popular theme, but we have since likely reached peak auto, and the forward growth is not as attractive as it once was. It is cheap (6X forward earnings), but so far it has proven to be a value trap. We would look for opportunities elsewhere in the industrials segment.
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It reports Wednesday. It has disappointed due to warranty costs. With long-term interest costs high and likely rising, their sales could be stalling. The stock has been awful.

Problem is that Ford has big warranty issues--it costs so much to fix a car. Is -9% this year so far. The auto stocks need a rate cut. 

We should be concerned about possible tariffs. Though trading at a cheap 10x, he wouldn't buy.

(Note the short timeframe.) 
Bought closer to $10 in his aggressive strategy. Likely to sell very soon, as it's nearing the top of its range. Don't be a new buyer right now.

He did not like some metrics in their last report: the warranty number, and how much they're losing in EVs. He likes the CEO and wishes he will do well, but can't recommend Ford.

He avoids car companies, because it's a tough business. Their report last night proves it--they've having a tough time. He prefers car parts makers.

He gave up on it. They aren't buying back stock. If the company was as cheap as he thought it was, they would be buying back a lot of shares now. He chose the wrong horse, should've bought GM instead.

Would recommend waiting before investing. Could be upcoming catalyst for growth in share price. Chart would suggest buying around $9. 

This is not a conservative long term play and is in their aggressive platform. It has been in a pretty clear pattern. If it pulls back to $10  then buy and sell at the one of the higher points in the pattern. You could buy this in legs.       Buy 10  Hold 15  Sell 3

Along with others, seeing muted sales in the EV space. Guided down for the year. Very cheap, ~6-7x earnings, will stay muted. Very little exuberance. Pure plays in the space have the advantage.

It's been a long time since the Model T. When you think about Ford today, there's more competition coming from the Chinese OEMs, which are dominating the domestic market and giving TSLA a run for its money. Export risk. US auto sales on a more muted path since Covid, residual car prices have been coming down. Competition's really picked up, and that's not going to change.

Yes, investors are definitely in a mood. Earnings season has seen some significant gap downs. When looking at earnings for Ford and all the other automakers, it's kind of deceiving, as the capital intensity of these businesses is high. They're far more expensive on free cashflow than they are on price-to-earnings.