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The more and more Wall Street focuses on the narrow short-term concept of quarterly earnings figures and the analysts who try to set such expectations, the more investors can profit when others overreact. The latest earnings miss from Ford is a perfect example.

Shares of the U.S. auto maker have dropped 3 points, or 14%, over the last two days after the company missed analyst forecasts for the fourth quarter. Never mind that 2010 was Ford's most profitable year in about a decade, or that its momentum is likely to continue in 2011, as the U.S. car market expands by a million units or more versus 2010.

It is certainly true that Ford's management should have been more clear in their expectations for production costs and capital expenditures last quarter, to avoid this type of reaction to unexpected news, but the fundamentals at Ford have been strong and continue to be regardless of this earnings miss.

Commodity cost pressures will not be going away, and Ford will continue to invest heavily in development and new production facilities as it has seen a resurgence in the U.S. in large part to the success of their innovation lately. Investors who would like to play the comeback of the U.S. auto industry, both in terms of Ford's own remake under Alan Mulally and the growing U.S. market (unit sales of 13 million this year versus less than 12 in 2010 are what Ford expects), have been given a unique chance to buy Ford stock at $16 today, a nearly $3 discount from where it was last Friday.

The fundamentals at Ford really have not changed at all over the last two days, but as goes investor sentiment so goes the stock price, in the short term anyway. I suspect we will see Ford back to $19 or $20 per share (at least) sometime this year.

Disclosure: I am long F.

Source: Wall Street's Ford Obsession Is a Great Opportunity for Investors

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