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Varchild2008 (84.22)

Against the Grain: Buy FORD (F)

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November 03, 2009 – Comments (4) | RELATED TICKERS: F

HOLD or BUY your stake in (F) is going against the grain...

TheStreet.Com  /  "Wrong about DPS when they were bearish" .com

Has just told shareholders to sell their stake in FORD.... Effectively opening up a mass sell-off at some point which would lead to being able to buy (F) on the cheap.

How is going against the grain on (F) translate to SELL?  and not BUY?

As far as I can tell (F) did not close at or above a 52-week high.  In fact it closed last night a full $1.28 below 52-week high of $8.86.

If this was pushing to new highs and someone said SELL!!!!  Then I'd believe that would certainly be going against the grain.

But telling people to CONVICTION BUY (F) and providing an $11.00 price target?  NOW THAT in today's world is Going Against the Grain.

There are still plenty of All Stars squeamish over Ford's debt and share dillution and other balance sheet problems.

There is still a chorus of anxst over the UAW rejection of the contract deal.

There is still a host of BEARS out there on (F).

Goldman Sachs's $11.00 .... Not the "TheStreet.com's  Anal Retentiveness" is what it means when you say to Go Against the Grain.

Goldman Sachs consistently goes against the grain on a lot of stocks saying Haliburton was a buy long before anyone else would.  Jim Cramer beat up Goldman Sachs after they declared HAL as a buy ... this was much earlier in the year.  Yet HAL's share price went higher and higher and Jim Cramer's reputation went lower and lower with it.

Face the facts..... (F) FORD is a *Load em Up* stock long term....

4 Comments – Post Your Own

#1) On November 03, 2009 at 12:41 PM, guiron (21.36) wrote:

Ford isn't going away, but their debt is crushing. I think it could be an excellent LTBH, but I am also not sure if common stock or bonds would survive a restructuring without at least getting battered around.

OTOH, in this market GS can do no wrong, so I don't necessarily think it's a bad idea to take their picks, because I think the market will tend to follow them, rational or not. But if the fundamentals aren't there, F could hit $11 or higher on momentum from the GS call and deflate very quickly when a bit of bad news sends the whole thing tumbling.

I wouldn't be surprised to see F trade in a range for a while as high as $11, but I'm not all that optimistic about the possibility of sustained topline growth, or if it's there how that might provide returns to investors before the mountain of debt is cleared away.

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#2) On November 03, 2009 at 4:15 PM, Varchild2008 (84.22) wrote:

The Sale of Volvo will help more than anyone is factoring in when it comes to this DEBT business.

Both STREET.com and CODY's analysis from FoxBusiness  Network (TV) seem to have discarded or ignored the significance of unloading VOLVO on GEELY.

VOLVO has been improving lately but is still loss making.  Handing VOLVO off means releasing themselves from a still loss making business so they can focus more on well the Ford Focus!  The Ford Taurus!  The Lincoln brands... The Mercury Brands....

Bottom Line.....   A smaller FORD is a thriving FORD....  The CAW negotiations were sucessful and that helps the cost structure as well going into 2010.

2010 is shaping up to be a much less costly set of expenditures to deal with quarter to quarter and FORD is still going to continue to look for ways to shed costs...

The DEBT seems like a small obstacle to me given the cost cutting FORD is capable of doing over time even in spite of a beligerant UAW work force.

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#3) On November 07, 2009 at 9:56 AM, Jazzenjohn1 (53.52) wrote:

You've got it backwards between the CAW and the UAW. The CAW are far more radical than the UAW are. While it is true the CAW finally passed concessions, they were the same concessions the UAW passed 8 months ago.

  The concessions the UAW didn't pass are of little significance. The wage freeze on new hires is more symbolic than anything else since we've closed over a dozen plants and shed 50,000 hourly jobs at Ford alone. They can hire 9000 workers  between now and 2011 according to the current contract. There are only a few hundred of them, if that many, but It would have caused friction between old and new workers. Also many people felt they shouldn't have to shoulder a wage freeze anyway since they're paid less.

The whole reason they wanted this latest concession was the no strike clause, which would make the negotiations in 2011 almost unnecessary. In my opinion, the fact that GM and Fiat have the no strike clause essentially makes it such that we have it as well. There is no way Ford workers could get a wage or benefit improvement that the Management of GM or Fiat didn't agree to.

It would have streamlined the 2011 negotiations and let Ford management sleep a little easier but not much else.

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#4) On March 01, 2010 at 9:10 PM, BrandonPaulChevy (< 20) wrote:

I won't buy ford mainly becasue it has bad Air Mass Meter on its cars. I would rather buy other car makes than ford.

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