Without sounding presumptuous, there are times when some stocks have no other direction to go other than up. Ford (F) is presently experiencing such a time and if you have shares in Ford it may interest you to know that it is poised to rise in the coming quarters and beyond. The assertion that Ford is bound to rise sits comfortably on a multi-legged stood with each of the legs planted firmly on solid ground.
One of the legs of the stool is the recent development that saw Ford freeing its iconic Blue Oval and Mustang Trademark among its other assets from the hold of its lenders. You will remember that Ford had pledged its iconic Blue Logo, Mustang trademark, its plants, and even its headquarters among other things as collateral to secure a $23.5 billion loan in 2006.
The loan package protected Ford from going under during the recession and ensured that it did not need the bailout from the government just like competitors General Motors (GM) and Chrysler. However, the mere fact that Ford did not declare bankruptcy held it responsible for paying its debt unlike the competitors who were able to walk away from a substantial part of their debts. Yet, as of September 2011, Ford had been able to repay a substantial part of the loans.
Some more great news has it that Ford recently got an upgrade from Moody's based the strength of its position in North America as well as the health of its finances. According to the official statement from Moody's "The upgrade of Ford recognizes the strength of the company's position in North America, its robust liquidity position, and our expectation that the company will continue to embrace sound operating and financial disciplines". It also goes forward to say that, "We believe that these strengths will enable Ford to maintain an investment grade profile in the face of the sector's ongoing cyclicality and weakness in the European market."
It was all fun at Ford yesterday with different statements coming from management all showing the level of their happiness with the developments. Quoting Bill Ford, executive chairman, Ford Motors "The Ford Blue Oval is back where it belongs with the Ford family of 166,000 employees around the world. This is a great day for us and is the result of several years of hard work and progress by everyone associated with Ford."
"When we pledged the Ford Blue Oval as part of the loan package, we were not just pledging an asset. We pledged our heritage. The Ford Blue Oval is one of the most recognized symbols in the world, and it is a source of great pride and passion, both inside and outside our company. Getting the Ford Blue Oval back feels amazing, and it is one of the best days that I can remember." The news, which also saw the creditworthiness of Ford moving from Ba1 up to a staunch Baa3, will surely go a long way in helping Ford to borrow at lower interest rates while reducing its borrowing expenses in general.
Another leg of the stool is the fact that Ford's automobile dealers will start booking consumer orders for the Ford C-MAX Hybrid, which is scheduled to be released this fall. The C-MAX is currently slated to bear a price tag of $25,995, plus an unknown delivery charge and will be at the very least $500 cheaper than then closest competitor; the Prius V from Toyota (TM). However, the good news does not end with the lower price tag, rather the projected strength of the C-MAX lies in its other innovative features. Such features include, but is not limited to, its improved fuel efficiency, spacious cabin for five passengers as well as a hand-free liftgate.
Another argument that I find supportive of the fact that Ford is upward bound is the fact that it has plans to introduce new and refreshed automobiles into the market place at the fastest rate of 26% in the industry. This is higher than the replacement rate of General Motors set at 25%, Toyota at 24% and Nissan Motor at 23%. However, the replacement rate for Honda (HMC) is still unknown. Yet, it is well-known fact that the demand for new automobiles is insatiable, especially in North America. Thus, you should not be surprised if Ford is able to capture a bigger share of the automobile market between the years 2013 and 2016.
Another two interesting tidbits that will surely see Ford rising is the fact that it still stands as the leading automaker in the United States to understand the importance of the Internet, with special emphasis on the social media as tool for driving trade forward. The first tidbit sees Ford teaming up with Yahoo! (YHOO) to release the teaser of a video previewing its reality competition show called "plugged in". "Plugged in" is a reality show that complements the launch of Ford's 2012 Focus Electric, a car that has been made to run without using gasoline. The show will be aired exclusively on Yahoo! Screen and will be available to Yahoo's 61 million monthly visitors as a means of promoting the electric vehicle.
The second bit of the news is the recent milestone that was reached by Ford Mustang in having more than 4 million fans on Facebook (FB). News has it the fan page was growing at a rate of 14,000 fans daily on the average and the page currently stands as the most popular page for a nameplate vehicle in the world. This growing fan base is also attributed to the fact that Ford is also committed to using paid online marketing strategies to grow its business despite the fact that it has a passionate fan base.
However, Ford may be in for a tough time with the mistrial that was declared in the lawsuit filed by the attorneys of a woman called Helen Guzman. The woman was involved in an accident that paralyzed her and killed her mother while she was driving a Ford F-150. It was reported that her attorneys sued Ford for absence of an airbag curtain in the car and are alleging that Ford intentionally withheld information that may lead to a possible factory defect. The new trial date is set for October 1, thus, it is still too early to state what effect the lawsuit will have on Ford.
Yet, when all is said and done, there is no doubt in my mind that a bullish trend for Ford in the coming quarters and years is very certain.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.