Seidman Investment Portfolio Organization
Winter 2012 Buy Summary:
Turner Novak - General Member
Ford is the second largest U.S. producer of light vehicles and consists of two operating departments; automotive and financing.
Strengths
- Overall global demand for automobiles expected to rise over 2012
- Reinstatement of quarterly dividend will provide long-term stable income
- Effectively 0% interest rates reduces interest expense and encourages growth
- Increasing its line of EcoBoost cars by 300% to meet a demand for fuel-efficient cars due to rising gasoline prices
- Highest free cash ratio of all automakers at $1.76 per share
- Only U.S. automaker to survive the financial crash without government assistance
- Solid income growth and policy easing in emerging markets, coupled with improving U.S. fundamentals, are supportive of increasing industry sales; 2012 global industry sales projected to be about 80 million units
Weaknesses
- The European debt crisis and overall European economy will affect European sales and most likely cause low sales in the short-term
- The risk of a double-dip recession causes uncertainty on whether consumers will purchase new automobiles
Page last modified March 11, 2012
