Ford: No Mulally, No Problem

Apr.24.14 | About: Ford Motor (F)


Kudos to Mr. Mulally for a job well done in turning around Ford.

COO Mark Fields will be stepping into Mr. Mulally's role as CEO for the company.

Mr. Mulally's departure doesn't alter my bullish sentiment on Ford.

I got a few more e-mails and texts yesterday than I thought I would get with regards to Alan Mulally announcing that he's going to be departing Ford (NYSE:F) soon. Friends of mine asked if it was going to change my bullish sentiment on the company, and the answer to that question is "no." I'm going to remain long Ford, and see how Mr. Fields can transition into the role.

But first, some acknowledgment for a job well done for Mr. Mulally, who came over from Boeing (NYSE:BA) in 2006.

Mr. Mulally has had a fantastic tenure as Ford's CEO. He helped Ford dodge bankruptcy and basically turned around the entire company by slashing expenses and creating new product standards. Ford is what it is today due to the leadership of Alan Mulally, and that should be rewarded.

Mark Fields also played a key role as COO in Ford's success.

Ford has announced that Mark Fields is going to be its next CEO. Fields is currently the COO for the company, and is likely the most suited to step into the role with little or no transition. COOs are often the "right hand man" for a CEO looking to keep tabs on the operations of his or her company.

The announcement is supposed to be coming soon - Ford seems to be speeding it up every time we hear news about the situation. Mulally is going to be serving on the Board of another company after leaving Ford - the details of which haven't been disclosed yet. The sentiment at Ford was to avoid a "Ballmer/Nadella" saga that could potentially negatively affect the company and/or its stock; they were going to act with some decisiveness during the change from the get-go.

Mr. Fields certainly has a great opportunity in front of him. Ford is growing quicker than it ever has, and the company's recent success in Europe and Asia are catalyzing new highs for the company's stock and increased credibility behind the brand. Further, the new design of Ford's vehicles has potential buyers the most excited that they've been about Ford since I can even remember. Ford is definitely in a position to "strike while the iron's hot."

Mr. Fields, having been part and parcel with the Mulally-led turnaround, should have a smooth transition into the role.

Going forward from here, the focus is going to be on the new F-150 line made from aluminum that Ford is working on. Also, Ford's recently disclosed plans of redoing its Lincoln line of vehicles, potentially to try and boost luxury sales overseas and in China, where the company has performed well.

I bought more Ford just last week.

The price of Ford's stock, in my opinion, continues to look attractive for those that are looking to get into Ford - regardless of who the CEO is. The way that the company has been growing versus the way the stock price has responded has baffled me a bit. With numbers like Ford has been posting overseas, I'd expect to see this stock more towards the $20 range, and have placed my bet accordingly.

With a forward P/E of just around 12, Ford's continued aggressive growth domestically and overseas shows that this company is undervalued at its current multiple. Thus, I had no issues pulling the trigger last week and plan to do so again, should the stock once again dip in the face of the company's fundamental progress that it continues to show.

I wish Mr. Mulally the best of luck in his future endeavors, he'll surely leave a legacy at Ford as history will remember him as the only CEO who didn't take a bailout during the auto crisis that crippled companies like General Motors (NYSE:GM).

Godspeed, Mr. Mulally, and welcome, Mr. Fields.

Disclosure: I am long F, GM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.