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With the world economy slowing down considerably, especially in Europe and China, cyclical stocks have been out of favor these days. But with many cyclical stocks trading at near record lows, contrarian investors may want to nibble into the sector, accumulating possible turnarounds. Ford Motor Company (NYSE:F) should be one of them, for four reasons, as I will outline in this article.

First, Ford is seeing an improvement in company fundamentals. With improving quality and the introduction of new models, Ford has been benefiting from the flip-flops of Toyota Motor Corporation (NYSE:TM). The company has further expanded its overseas presence, especially in China, where it is the largest foreign company; it is also expected to benefit from the backlash of the territorial disputes between Japan and China. Reflecting these improving fundamentals, the company has already been beating analyst estimates.

Second, the company is seeing improving financial fundamentals. Ford has been the only American automobile company that didn't receive government money during the 2008 crisis. And with $23.79 billion cash ($6.29 per share) at hand and $11.25 billion in operating cash flow, the company is in good position to survive even in a recession - far better than General Motors Company (NYSE:GM), which is still in business with government support. Last year, both S&P and Fitch raised Ford's credit rating.

Ford Motor Company

Operating Margin

4.99%

Quarterly Revenue Growth

-6.5%

Quarterly earnings growth

-56.6%

Forward P/E*

7.04

Total Cash

$23.79B

Operating cash flow

$9.54B

*Fye Dec 30, 2013; Source: Yahoo.Finance.com

Third, Ford Motor Company has been very aggressive in addressing its European market woes by idling factories, cutting thousands of jobs, and taking a $3 billion charge over the next two years. And fourth, Ford, together with the auto industry as a whole, could benefit from a correction in the prices of raw material, such as copper and steel.

Bottom line: Recession or no recession, Ford Motor Company is a long-term buy, especially at its current valuation levels.

Source: What To Do With Ford's Stock