Time To Ride Ford's Turnaround

| About: Ford Motor (F)
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Ford's (NYSE:F) stock was moving on a higher gear this morning, following the news that its sales rose 6.5 percent in November, beating Edmunds' expectations. In addition, Ford boosted its vehicle production by 11 percent in the first quarter over a year earlier.

That's certainly good news to investors who have been on the long side of the market, and a good entry point for investors who want to ride the company's turnaround, considering four favorable factors:

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 was 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) 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


Quarterly Revenue Growth


Quarterly earnings growth


Forward P/E*


Total Cash


Operating cash flow


*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.

Disclosure: I am long F. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.