Ford: November Sales Leave Reasons For Optimism

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About: Ford Motor Company (F)
by: BAM Investments
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Summary

While Ford's U.S. sales decreased 6.9% in November, which came in better than the 9.3% reduction forecasted by Edmunds, I am optimistic given the company's focus on higher margin vehicles.

Ford is selling the right sales mix as overall transaction prices continued to increase as Ford’s average transaction price per vehicle gained $1,600, versus an industry average of approximately $780.

This mix is driving top line growth as third quarter 2018 earnings showed a quarterly revenue increase of 3% up to $37.6 billion.

While cash is expected to tighten due to restructuring costs; management is committed to the dividend, and the changes will better position the company for the long term.

Investment Thesis

Ford (NYSE:F) posted a better-than-expected month in October with sales decreasing only 3.9% compared to expectations of 5%. Despite beating expectations, Ford saw a decrease in quantity along with the entire