Ford (F) has long counted on the sale of trucks as a staple for the company and growth. It is not all that often that you hear about Ford having a car with sex appeal, but the new Ford Fusion is indeed turning heads, and the reward is paying off with a 10% increase to that model. The big story though is truck and SUV sales. These categories are what led Ford to an impressive 14% increase in sales and delivered the most impressive month of May since 2006.
Ford is seeing that its brand is carrying more and more consumer appeal. Redesigns in the Fusion (which looks very much like hot consumer favorite Kia Optima) and Escape have fueled four straight record selling months for these models. The company sold an impressive 70,000 F-Series trucks. This is a number that had not been eclipsed in 6 years. It is also a major positive in that it could be indicating that construction is seeing a turn-around.
Adding some wind to the sales was an announcement by the company that its Q3 production level is slated to be at 740,000 units, a full 10% higher than last year. Essentially, Ford has popular products to sell and believes that the sales pace will continue in an upward trajectory. For sector watchers production is a key component of evaluating the near term prospects of a company.
Just six months ago investors could have bought Ford stock for just $11 per share. The equity currently trades at a bit below $16. Each successive month we have seen a stepped increase in share price. While it may be tempting to think that the equity is finding a top, I believe that the combination of vehicles with the "hot factor" like the Fusion and Escape, as well as a more robust truck market, is a recipe for increased traction at Ford and appreciation in the price of the equity.
While Ford, like many auto makers, will be sensitive to the overall economy, it will also be on the cutting edge of an improving economy. Stay Tuned.