Automakers Vs. Autumn: How Ford, GM Have Fared Historically In The Fall

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Includes: F, GM
by: Bachar Samawi

Share prices for both Ford Motor (NYSE:F) and General Motors (NYSE:GM) are currently down substantially from their 52-week highs. As of Monday, August 29, Ford is at $10.93, down 42.4% from its 52-week high of $18.97. Meanwhile, General Motors is at $23.79, down 39.7% from its 52-week high of $39.48. Both stocks have been severely punished primarily due to fears of future economic slowdown. Have such stocks reached bottom, or is there more turbulence ahead in September and October?

The month of October has built itself a rather bad reputation on Wall Street due to several market crashes that occurred during the month: the Panic of October 1907, Black Tuesday (1929), Black Monday (October 1987) and the crash of October 2008.

However, when we examined data for Ford share price for the months of September and October during the past 35 years, from 1977 to 2011, we were surprised that there were no significant implications on Ford's share price during these two months of the year.

Ford share price from September 1 to November 1 fell an average of 1.57% during the years of 1977 to 2010, with 16 up years, 17 down years and 1 unchanged year. Meanwhile, such price fell an average of 3.04% from September 1 to October 1, with 15 up years, 18 down years and 1 unchanged year. As for October 1 to November 1, it actually rose an average of 1.87%, with 17 up years and 17 down years. It seems September deserves a worse reputation than October.

Although Ford share prices fell an average of about 3.04% in September during past 35 years, given that both GM and F are currently substantially below their 52-week highs, current share price levels may prove to be attractive for the long haul, unless a severe prolonged recession materializes.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.