Should Ford stock be considered for purchase?

Ford is an old American brand that was founded by Henry Ford in 1903. The company has its HQs in Michigan. It is a famous brand in the automobiles segment for many years and established its position with the best services.

Ford stock has undergone many changes from February to date. The present share price is around $6 per share and it is the lowest trend for June. The price was $7.53 on June 8 and the rapid transformation until this period has been quite vulnerable in the understanding of stock analysts. The company moved to over a 50 percent rise in the stocks since the lowest price in March. The prices have risen from $4 level in March having an impact on the consumer sentiments.

The company’s stocks were badly hit by the pandemic of the coronavirus. The demand and consecutive revenues will be much lower than the last year due to the virus attack. The company had a fall in stock prices from the year 2017 (sales of $7.8B) to 2019 (sales of $47M). The revenues of the company also reduced to a level.

The P/S level has significantly reduced over recent times. The change in net income margin has reduced in the previous two years. The stock can’t see any upward trend due to the Covid-19 outbreak. The company has invested in innovative ideas but the China trade tensions are not leading it towards any outcome. The company is dependent on China for the manufacturing of some parts and hence, generating the sales revenue.

The fundamental and technical position has to be analyzed for making the appropriate decision to trade in the Ford Stock. The projection of $5 Billion loss is anticipated and the company already dropped its revenues in Q1 earnings. The quarterly cash dividend was deferred by the company. The chances of the cash flow will improve only after the sales resume after restoring the payables and the vehicle payments. The company’s joint venture with Chongqing Changan Automobile from China has shut down due to the COVID crisis.

The first quarterly report was a failure in providing any positive results for Ford Stock. The stocks moved to a certain high level in May because Ford announced the reopening of the North American factories on May 18. The real economy came under pressure and the Ford stock will break the downtrend in the upcoming time. The shares touched a high value of $7.74 on 8 June but it deteriorated after that phase. The concept of electric cars makes an ambitious trend for the company in improving the financial stats. The projection for Mach-E production had to begin in 2020 but due to coronavirus pandemic, it is delayed.

The company has a strong base but the present global scenario has put a halt on this automotive supply chain group. The recent deal was done by Ford Motor co. have signed a deal with Vodafone Group for the installation of a private 5G network in UK’s Essex for Electric-Vehicle EV facility. It could be a positive move for providing accurate control and analysis. It could be a lucrative move for the investors to think about investments and trade stocks in this period.

About Travis Garlick 1801 Articles
Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.