Ford Motor: Back To Normal?

Dec. 04, 2018 12:42 PM ETFord Motor Company (F) StockF137 Comments
Achilles Research
34.35K Followers

Summary

  • Ford Motor's shares could get a lift from easing trade tensions.
  • The U.S. and China have agreed to a truce, which could be a major positive catalyst for stocks as the year comes to an end.
  • Ford Motor remains dirt-cheap, has an attractive risk/reward-combination.
  • An investment in F yields 6.4 percent.

New life could be breathed into Ford Motor's (NYSE:F) shares after the United States and China struck a conciliatory tone at the most recent G20 meeting in Argentina. Ford Motor's shares have dropped precipitously in 2018 as the trade conflict between the two largest economies in the world gradually deteriorated over the summer. Easing tensions between the two countries would be a major positive catalyst for stock prices, especially Ford Motor. Shares remain dirt-cheap, and come with a 6.4 percent yield.

Ford Motor's shares have dropped 23.8 percent this year, largely because of the trade war between the U.S. and China. From a technical perspective, Ford Motor is currently neither overbought nor oversold, based on the Relative Strength Index.

Source: StockCharts

Update About The Trade Conflict

Escalating trade tensions and retaliatory tariffs have been the single biggest negative catalyst for Ford Motor's shares in 2018. In September, the U.S. placed a 10 percent import duty on $200 billion of Chinese goods in order to get China to correct is trade practices. China reacted with tit-for-tat tariffs of its own, placing duties on $60 billion worth of U.S. imports.

Tit-for-tat tariffs have triggered a major correction in the stock market in October, aided by increasing concerns over higher short-term interest rates and surging bond yields. That said, though, in my last article on Ford Motor, titled "Ford Motor: 6.3% Yield And Dirt Cheap", I had this to say about the trade conflict between the United States and China:

Ford Motor's shares will remain volatile going forward, especially with respect to new tariff announcements on the part of either the United States or China. I continue to believe that the trade conflict between the U.S. and China will ultimately be resolved at the negotiating table.

The good news is that U.S. president Trump

This article was written by

34.35K Followers
I am a dividend investor and look for undervalued investments in the stock market. I identify misunderstood and undervalued equity investments and hold those securities until their price approximates my estimate of intrinsic value. I am a long-term investor only. I am building a $100,000 high-yield income portfolio. I am running this portfolio as an experiment to see if long-term sustainable income can be generated from a diversified pool of high-risk, high-yield securities. I am willing to accept high risk in order to meet my performance goals.

Analyst’s Disclosure:I am/we are long F, Gm. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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