The market further extended Monday's loss with an increasing volume as the deadline for fiscal cliff approaches. The Nasdaq led the loss with 0.74% where Apple Inc. (AAPL) dropped 1.38%. The S&P 500 dropped 0.48%, and the Dow Jones also lost 0.19%. Both DIA and SPY still closed above their 50-day MAs and 200-day MAs. QQQ sliced through its 200-day MA of $65.10 and 50-day MA of $64.81 and closed below both supports at $64.50. QQQ had turned bearish technically. Only basic materials sector managed with a gain of 0.35% while all other sectors closed in red again.
The market sentiment is driven with greed now with Fear & Greed Index at 60, increased from the previous close of 51. As reported by CBOE, the total put/call ratio for Wednesday was 0.96, and the index put/call ratio was 1.34. The equity put/call ratio was 0.74, and the CBOE volatility index (VIX) put/call ratio was 0.60. In the following, top stock had been identified through our daily options scanning process, with the scanning criteria where the daily call volume ratio was above 3.00 (3x of the average call volume) with a call volume above 10,000.
Average Call Volume
Daily Volume Ratio
Ford Motor Co. (F)
Source: Schaeffer's Research
Ford Motor Co.
Ford Motor Co. is a producer of cars and trucks and manufactures automobiles under its Ford and Lincoln brands. The company has about 16% market share in the United States and more than 8% share in Europe. Ford and Lincoln brand sales in North America and Europe made up 59% and 26% of 2011 auto revenue, respectively.
On December 26, Ford was reiterated by TheStreet Ratings as a hold with a ratings score of C. As reported,
"The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow."
On the same day, Ford announced that its 2013 Ford Fusion received an Acceptable Rating in the small overlap front crash test and earned the highest crash safety rating, Top Safety Pick+, from Insurance Institute for Highway Safety, as reported by Zacks.
For the current quarter ending in December, 2012, analysts are expecting an EPS of $0.25 with revenue of $32.99B. Analysts are also expecting EPS of $1.34 and revenue of $125.00B for 2012. For 2013, analysts are predicting an EPS of $1.46 with revenue of $130.85B, 4.7% increase compared to 2012, as seen from the table below.
(click to enlarge)
Source: Yahoo! Finance
Ford is expected to release its Q4, 2012 earnings on January 22, 2013.
Key Stats & Valuation
Ford currently has an enterprise value of $124.14B with a market cap of $48.76B. Ford has a total cash of $24.10B, mrq, and an operating cash flow of $9.17B with a levered free cash flow of -$22.10B. Ford has a book value of $4.94 per share.
By using the data obtained from Morningstar, Ford will be compared to its peers in the industry of auto manufacturers, including Toyota Motor Corp (TM), Daimler AG (DDAIF.PK), and Honda Motor Co. (HMC). Ford has a negative revenue growth (3-year average) of -2.1, compared to the industry average of 7.7. F generates higher operating margin of 4.3% and net margin of 13.4%, ttm, comparing to the averages of 5.1 and 5.1. Ford has stronger ROE of 142.5, as compared to the average of 14.4. Nonetheless, F has a higher debt-to-equity ratio of 3.8, comparing to the average of 0.9.
Ford currently has a P/E of 2.8, which is below the industry average of 8.7 and Ford's 5-year average of 3.8. Ford's P/B of 2.5 is higher than the industry average of 1.3 and P/S of 0.4 is lower than the industry average of 0.5. The Forward P/E is 7.7 for Ford, and the PEG ratio is 0.6.
Ford closed at $12.79 with a late-day surging and closed with 3.15% gain. The volume of 140.27M was 3.33x of the 30-day average volume of 42.12M. F has a high beta of 2.28. Ford had been trading in the range of $8.82-$13.05 in the past 52 weeks. The MACD (12, 26, 9) indicator had been showing a bullish trend since December 20, and the MACD difference continued to diverge. The momentum indicator, RSI (14), is showing a strong bullish momentum and is in the over-bought territory at 79.85. Ford is trading above its 50-day MA of $11.05 and 200-day MA of $10.52 and had broken through its R2 resistance point of $12.36 on December 24, as seen from the chart below. F is short-term bullish, technically.
Unusual Options Activities
The most active option on Wednesday was Jan. 18, 2013 call at the strike price of $12.50 with a volume of 244,707 and an open interest of 234,529. The implied volatility is 31.9, and the chance of breakeven is 38.01. The second most active call was Jan. 18, 2013 call at the strike price of $11.00 with a volume of 205,277 and an open interest of 150,429. The implied volatility is 35.8, and the chance of breakeven is 47.50. The historical volatility for Ford is 24.36 for 1 month, 26.53 for 3 months, and 24.93 for 1 year.
Note: All numbers/prices are quoted from the closing of December 26, 2012 with the data provided from Barron's, MorningStar, Schaeffer's Investment Research, Inc., Google Finance, and Yahoo! Finance. Investors and traders are recommended to do their own due diligence and research before making any trading/investing decisions.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.