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Fundamental Analysis of Ford Company

|Includes:Ford Motor Company (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.
Stocks: F