Tuesday, April 14, 2015

One Factor Bringing Ford (F) Stock Up Today

NEW YORK (TheStreet) -- Shares of Ford were gaining 0.8% to $15.99 Tuesday following a report that the auto maker will invest about $2.5 billion in two plants in Mexico. Ford will invest $1.3 billion to expand its plant in northern Chihuahua which will build two new diesel engines, according to Reuters. The company will also invest $1.2 billion in a transmission plant located in central Guanajuato, according to the news service. The company will reportedly announce its investments in to two plants on Friday in Mexico City to celebrate its 90th year in the country. Ford currently has three plants to produce its Fiesta, Fusion, and Lincoln MKZ vehicles in Mexico. About 15.1 million shares of Ford were traded by 2:48 p.m. Tuesday, compared to the company's average trading volume of about 27.4 million shares a day. TheStreet Ratings team rates FORD MOTOR CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation: "We rate FORD MOTOR CO (F) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its generally strong cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows: Net operating cash flow has significantly increased by 588.25% to $2,168.00 million when compared to the same quarter last year. In addition, FORD MOTOR CO has also vastly surpassed the industry average cash flow growth rate of -24.72%. Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.3%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. FORD MOTOR CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, FORD MOTOR CO reported lower earnings of $0.78 versus $1.75 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus $0.78). The gross profit margin for FORD MOTOR CO is rather low; currently it is at 16.65%. Regardless of F's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.14% trails the industry average. In its most recent trading session, F has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels. You can view the full analysis from the report here: F Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015


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