Seeking Alpha

Efsinvestment's  Instablog

Efsinvestment
Send Message
Efsinvestment.com website offers simple do-it-yourself type of investment ideas. You can download excel files that can easily calculate the Fair Value of a stock, along with O-Metrix score and Margin of Safety. Investment philosophy is to first determine the maximum loss, and invest... More
My company:
EcoFinStat Research & Training
My blog:
EFS Investment Research & Training
  • Fundamental Analysis of Ford Company 6 comments
    Mar 7, 2011 4:54 AM | about stocks: F

    Incorporated in 1919, Ford (NYSE:F) Motor Company engages in automotive production and financial services. Automotive unit operates on a global scale in Americas, Europe and Asia. Financial segment offers purchase credit in the form of retail and wholesale financing. Ford’s competitors that currently trade in stock markets include General Motors (GM), Toyota (TM), Honda (HMC), Tesla (TSLA), Nissan (NSANY), Daimler AG (DDAIF), and Volkswagen AG (VLKAY).

    Income Statement (in Millions)

     

    SALES

    NET INCOME

    EPS

    DIVIDEND

    2001

    $160.504

    -$5.347

    -$2,95

    $1,20

    2002

    $162.258

    $355

    $0,19

    $0,40

    2003

    $166.095

    $646

    $0,35

    $0,40

    2004

    $172.316

    $3.184

    $1,59

    $0,40

    2005

    $176.835

    $1.629

    $0,86

    $0,40

    2006

    $160.065

    -$12.629

    -$6,72

    $0,05

    2007

    $168.884

    -$2.836

    -$1,43

    $0,00

    2008

    $143.584

    -$14.775

    -$6,50

    $0,00

    2009

    $116.283

    $2.712

    $0,86

    $0,00

    2010

    $128.954

    $6.561

    $1,66

    $0,00

    Sales and Net IncomeFord’s golden year was 2005 where company made $176.8 billion in revenues. Since then, sales reduced to $130 billion. Ford was deeply affected from the financial crises in 2008. However, we see improvement in 2010 where Ford earned $1.66 per share.


    Dividend History: Ford Company did not pay dividends in the last 4 years. Over the years, annual dividends reduced from $1.2 to 0. Last year’s dividend yield was 0%. In fact, Ford has not paid any dividends since 2006. 

    BALANCE SHEET

     

    CURRENT ASSETS

    CURRENT LIABILITIES

    LONG TERM DEBT

    2001

    $276.543,00

    $268.757,00

    $167.173,00

    2002

    $295.222,00

    $289.632,00

    $167.331,00

    2003

    $310.723,00

    $299.072,00

    $177.998,00

    2004

    $295.487,00

    $278.050,00

    $129.330,00

    2005

    $269.459,00

    $256.017,00

    $119.980,00

    2006

    $279.196,00

    $282.661,00

    $171.832,00

    2007

    $279.264,00

    $273.636,00

    $168.530,00

    2008

    $216.052,00

    $231.773,00

    $151.669,00

    2009

    $192.040,00

    $199.860,00

    $131.635,00

    2010

    $164.687,00

    $165.360,00

    $103.988,00

    When we look at Ford’s current assets, we observe a declining trend since 2003. In 2003, the value of current assets was $299 million whereas in 2010 current assets amount to only $165 million. Current liabilities are highly volatile and they barely match the current assets. The only good news is the reduction in Ford’s long-term debt.

    Historical Fundamentals

     

     P/E

    PROFIT MARGIN (%)

    2001

    -7,90

    -3,30

    2002

    71,00

    0,20

    2003

    30,50

    0,40

    2004

    9,10

    1,80

    2005

    12,00

    0,90

    2006

    -1,10

    -7,90

    2007

    -5,70

    -1,70

    2008

    -0,80

    -10,30

    2009

    6,70

    2,30

    2010

    7,80

    5,10

    Ford’s average P/E ratio is extremely volatile and in years 2006, 2007, and 2008 it was negative. Net Profit margin is also remarkably low and in the same years, it was negative. Ford was able to achieve the maximum profit margin of 5.1% in 2010. However, 2008 was a disastrous year where net profit margin was -10.3%. 

    Direct Competitor Comparison

     

     

    F

    PVT1

    GM

    TM

    Industry

    Market Cap:

    56.95B

    N/A

    54.39B

    140.74B

    27.43B

     

    Employees:

    198,000

    N/A

    209,000

    318,001

    24.31K

     

    Qtrly Rev Growth (yoy):

    -1.30%

    N/A

    27.20%

    5.80%

    13.30%

     

    Revenue (ttm):

    133.36B

    17.71B1

    131.04B

    246.36B

    58.17B

     

    Gross Margin (ttm):

    15.73%

    N/A

    10.35%

    13.39%

    21.40%

     

    EBITDA (ttm):

    13.98B

    N/A

    9.10B

    23.37B

    5.77B

     

    Operating Margin (ttm):

    6.54%

    N/A

    1.66%

    3.00%

    6.46%

     

    Net Income (ttm):

    7.26B

    -3.78B1

    638.00M

    6.75B

    N/A

     

    EPS (ttm):

    1.89

    N/A

    -0.02

    4.30

    2.88

     

    P/E (ttm):

    8.68

    N/A

    N/A

    20.86

    15.85

     

    PEG (5 yr expected):

    0.49

    N/A

    1.17

    0.67

    0.46

     

    P/S (ttm):

    0.42

    N/A

    0.41

    0.57

    0.54

     

    Ford’s gross margin of 15.73% is below industry average of 21.40%. In 2010, operating margin was 6.54% which is slightly higher than the industry average of 6.46%. The expected PEG ratio of 0.49 is below industry standard as well. In past years, while revenues in the automotive industry were growing at a rate 13.30%, Ford’s revenues declined by -1.3%.

    Insider Transactions: Another warning sign about Ford stocks is the large volume of sales by the vice presidents, directors, and general counsel. In the last 2 months, insiders sold 633,000 shares worth $11.5 million.



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Themes: Stocks and Sectors, Transport Stocks: F
Back To Efsinvestment's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (7)
Track new comments
  • Süleyman Faruk
    , contributor
    Comments (11) | Send Message
     
    As statistics show us,Ford's performance in economic activity is not perfect on the contrary as if it went bankrupt when I see negative number in graphs.The company may have been affected by economic and financial crisis but why was Toyota not affected by this crisis?I think and I see there was Ford's bad situation before crisis.I do not know why this recession occurred but bad management maybe the reason.For example,according to statistical data,Ford’s gross margin of 15.73% is below industry average of 21.40%.Moreover, Average P/E ratio is extremely volatile and in years 2006, 2007, and 2008 it was negative and Ford Company did not pay dividends in the last 4 years.In conclusion,these 3 indicators,gross margin proportion,P/E ratio and dividens are most important things to understand companies economic situation and in terms of Ford issue,these indicators are unsuccesful when comparing to other companies.
    8 Mar 2011, 01:34 PM Reply Like
  • Furkan Çiftçi
    , contributor
    Comments (4) | Send Message
     
    If we look at statistics, Ford hasn't pay any dividend since 2006. Then, I think there is no reason to invest money there. If we can't get benefit from it, then what is the point?
    8 Mar 2011, 03:33 PM Reply Like
  • dersei
    , contributor
    Comments (5) | Send Message
     
    This is a fact, that the crisis in 2008 influenced many companies.Ford is also one of these firms. However, we see , that ford is in a bad situation for so long. Income statement does not seem so good, because net income is low. Even sometimes it falls to negative. If we look at the EPS, these values are volatile. We can say same thing for P/E ratio also. Hence, Ford does not seem as a profitable investment.
    8 Mar 2011, 04:46 PM Reply Like
  • frdndrngl
    , contributor
    Comments (6) | Send Message
     
    Todays oil prices is rising. Also, a lot of people want to green living places. From the Ford media, we shows that Ford's scientists are working hard and also they said that by 2012, half of Ford vehicles will be capable of running on alternative fuels . Due to this technological advances, it may provide to Ford increase their income and maybe it is so risky still, i think that it is worth to invest money to Ford. ( media.ford.com/article... )
    8 Mar 2011, 07:53 PM Reply Like
  • frdndrngl
    , contributor
    Comments (6) | Send Message
     
    In addition to above, after i did research in depth , In the first two months of 2011, Ford sales totaled 283,943, up 14 percent versus the same
    period a year ago. Retail sales were up 25 percent with the strongest growth in the East (where
    retail sales were up 45 percent) and California (where retail sales were up 43 percent).Also, Ford to Reduce Debt By an Additional $3 Billion Through Trust Preferred Securities Redemption. This numbers shows us that Ford is getting over himself.
    8 Mar 2011, 08:09 PM Reply Like
  • sedat akbacak
    , contributor
    Comments (6) | Send Message
     
    The problem why ford's stocks have been reducing for years might be that Ford can not compete with its competitor in automobile market anymore. With this routine we may expect a bankrucy for Ford unless they don't make a move.
    9 May 2011, 04:00 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.