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Long On Ford? Patience Is What It Is.

|Includes: Ford Motor Company (F)

For years Ford longs have imagined the reinvention and humanizing of Ford from a family driven to market driven force in the transportation industry.

More than a century of motor vehicle manufacturing behind us reads like a "how to" about how to grow a car company. I could mention many, but I will highlight Auburn, Pierce Arrow, Packard, Tucker, and Duesenberg, because merely being world class in innovation, sophistication, and quality is not enough. Certainly the last Oldsmobile off the line was vanilla compared to the 1903 Curved Dash Olds. But vanilla remains the most popular ice cream flavor - maybe because it can be used as the basis for many options for a truly enjoyable dessert experience.

Mustang is the story of Job One and Ford One. In the movie "A Faster Horse" (Netflix) We see the Mustang team leader Dave Pericak demonstrate the process that has allowed everything from Kia to Lamborghini to be easier to live with than a generation ago. Perhaps this explains why the 2015 Mustang GT350 shares boy's bedroom wall space where Lamborghini posters once reigned. Not just here in the U.S. but everywhere - youth are not only dreaming of and buying Mustangs; they are buying them.

My world was rocked when I sat in a $36,000 Ford F150 4 door. I am not a pickup fan, but this one fired some heart strings into me.

Optimism for the outcome is almost ordained; nevertheless Ford has lots of outstanding shares and a bunch of debt. Electric propulsion has issues Ford just committed to spending a $billion a year at a time when organic based fuels are too plentiful to even be profitable. A cold sober perspective poses lots of questions, but Ford has to play the Hybrid/Electric game. "IF" and "When" always matter.

Ford may languish beyond comfortable patience - perhaps only threatening the $14 mark this year but the smart money will be weighing the burden of caution - being left behind. My optimism is not about share price right now; it is about a juggernaut discovering and repairing a 100 year history of brilliant hits and total strike outs - pretty much spurts of genius and falling face first into a pig pen.

The "One" concept has no deficits or pitfalls; its advantages are currently translating to better performance from design to assembly to marketing and service. As Ford retires it's oldest models - fully embracing "ONE" and the simplified management of flexible unibody variants and truck construction, we'll see profit growing improving the bottom line, but also to fund research and prototype work. That will be a slow process, albeit a confidence building one.

With P/E 35 - 40% below the industry average, and market share growing by virtue of the newest platforms striking the right chords, Ford share prices are in the ideal snake belly position of ripening for a period of justifiable momentum - upward. Will E growth outpace P growth? I kinda doubt it.

And while every upward momentum has punctuation marks, let us remember that the P/E ratio, the lowering of debt while maintaining a competitive investment in new technology, buy back, and growing popularity of new models born of "One" technology (ala Dave Pericak's Mustang) provides investors an "ala carte" menu of putting Ford in their portfolios.

Supporting Documents

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Disclosure: I am/we are long F.