3SOF

Hi,

F could increase today...



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Thank You,
setravis

Picked up some F yesterday at 7.17.  I like how this came down to support below $7.00, and is moving up with higher volume after making a lower low.  Price target is around the $9.00 area where resistance has been found on it's last two moves into this area.  Stop will be on a close below the recent tweezer bottom of 6.78 for a dollar risk of around $200.

This is one of those trades that helps me sleep at night knowing I have a good entry and that F probably isn't going to move against me in a drastic way.  But as always, the trade is made with good risk parameters in mind.

I totally agree here. I've been following awhile and can see that they have been aggressively putting all their ducks in a row, so to speak. Looks similar to the GM turnaround  model and a decent long term hold.

Good luck to those holding.

uc.

1. Introduction

GM is the best performing stock in the Dow Jones Industrial Average in 2006. So I wonder about F. There has been very high volume lately.

2. Profile

Ford Motor Company engages in the manufacture and distribution of automobiles worldwide.  (complete profile here)

3. Technical Analysis
3.1. All History Chart



F is down 81% from its peak in 1998. The long term trend is bearish.

3.2. Medium Term Chart



The medium term chart also shows a declining picture. After a strong rebound in mid 2006 the stock is moving down again.

3.3. Short Term Chart



Indeed, volume has been very high lately, but the stock is trading below its 50 and 200 days moving average. People buying in this zone are trying to pick a bottom, and that's extremely hard, usually the stock makes so much up and down violent moves that it throws all small investors like us out of the ship before moving higher.

Using technical analysis and respecting the idea that "the trend is your friend", F is a stock I would avoid. Let's check the fundamentals.

4. Fundamental Analysis
4.1. Number of Shares Outstanding



I see historical dilution and I naturally worry about that. The current market cap is 1,888,893,855*$7.18 = $13.56 B

4.2. Liquidity



Ford's balance sheet looks like one of an airline company. Massive values everywhere. I see there were some deep changes on the balance sheet on this latest quarter and perhaps that's what is explaining F's share price decline. Historically the stock has been trading around its Total Equity (Book Value), so that's the graph you see above.

Book value declined to $9.163 B in Q3 2006, that gives me a Book value per share of $9.163 B/1.889 B shares = $4.85 per share.

I see there were about $33 B in current assets that were being carried as "Other Current Assets" gone. And I see "Gross Fixed Assets" up by $27 B and "Net Fixed Assets" also up by $27 B. I don't like these changes.

4.3. Revenues



Revenues are going down in 2006. Analysts estimates are for a decline of 14.8% from 2005 levels. Revenues fell 11.6% sequentially in the 3rd quarter alone.

4.4. Profits



The decline in sales is telling me the company is about to report a huge loss for for full fiscal 2006. It already lost ($3.57) for the nine months so far in 2006, losing ($2.79) in the 3rd quarter alone.

5. General Overview

I think it is pretty clear F will go down to about $4 - $5 a share within some months time. The recent big volume tells me buyers are attracted by the declining prices (and analysts bullish recommendations), but probably supply will ultimately win, because fundamentals show a deteriorating picture.

Therefore I would avoid trying to catch a bottom in F shares here, but good luck

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Thanks for the analysis, David.  Excellent as always!!!

There is no doubt that Ford as a company really sucks!  They continue to lose money and market share and have yet to come up with a new vision that will help reverse this downward trajectory they have found themselves in.

Here is what I see in a trade such as this and what caused me to take a position (and please don't take this as a buy recommendation).

1.  The chart shows high volume selling to support and good volume on the rebound with a series of higher highs and higher lows.  My entry was a little early but I liked what I saw and risk management rules are in place.  This, the MACD turning up and the RSI coming off bottom are the real reason that I decided to place the trade.  All based on purely technical analysis.

2. F had an upgrade yesterday.  Yahoo shows 64% institutional ownership as of the last reporting period.  Some institutions have an enormous stake in Ford and you can bet that they aren't happy about the decline in their investment value.  I suspect that this isn't the last of the upgrades we see over the short term.  This will get the attention of the individual investor.

3.  There is a lot of "hope" for Ford (and GM) and the American auto industry in general.  I believe that is what has caused Ford to previously find buyers in the $6-7 range and what has caused it to move up to the $9.00 area twice this year.  TM is kicking their butts and will continue to do so until these guys pull their heads out of their asses and do something about it.  Will that wakeup call happen sometime soon?  Who knows.  In the meantime, the institutional investors will sit on their large chunks of Ford stock and the retail investor will continue to "hope" that Ford's time is about to arrive.

4. The last two times Ford made it up to the $9.00 area was on talk of proposed changes, buyouts and whatever.  I suspect we will start to hear more of that again soon.

This is very speculative stuff here and I caution people to not jump into something like this without a plan.  I have no preconcieved notion about Ford being a good investment and could change my mind on this trade in a heartbeat.  David is the master and his insight and analysis skills are at the top of the investment world.  I agree 100% that this company is not for investing.  With that in mind, stocks go up and stocks go down.  If I can be in one as it's going up, well, I'll be making some green.

I'm curious David.  I have tried to get some of the information you are able to display (such as the EPS charts and outstanding shares charts) but I can't find anything that goes back more than a couple of years.  Are you getting your information from Metastock and building the charts yourself?  Or are you getting them exactly as you display them?  Or maybe from quarterly and annual reports? Thanks!

Oops, missed another upgrade this morning. 

Hi basonista, I was going out for lunch now (the second lol), but your comments and questions are too good to wait.

So, let's see, I see the analysts upgrades and general "hope" as bearish arguments, not bullish. The big money is in, wants to get out, so it is trying to bring the crowd's attention. F is up 1.7% today, but the trend is down.

Anyway, I know you know what you're doing and why, so you'll always learn from this trade. And you may even be right and F's bottom is in, although I disagree, I've been wrong in the past and will be wrong again.

QuoteI'm curious David.  I have tried to get some of the information you are able to display (such as the EPS charts and outstanding shares charts) but I can't find anything that goes back more than a couple of years.  Are you getting your information from Metastock and building the charts yourself?  Or are you getting them exactly as you display them?  Or maybe from quarterly and annual reports? Thanks!

No, Metastock is a technical analysis software, it doesn't have any fundamental data. I get my Fundamental tables from www.alphatrade.com's "Fundamentals" service (they have fundamental data since 1994 for almost every stock listed, OTCBB included - they should pay me for this publicity ). Then I insert the values on Excel to get the fundamental graphs you see.

It's kind of hard work. I already put Ramsburg on the job to make this task easier, and although he came up with some excel formulas, there are many exceptions and it doesn't always work automatically. But he sure reduced the time of making one of these graphs by a half, as I was doing everything manually

As I said before, you're on the right track, keep up ! (your sector analysis looks promising, I still need to learn how it works, thanks for all you do).

Quote from: David Randolph on December 20, 2006, 09:55:21 AM
1. Introduction

GM is the best performing stock in the Dow Jones Industrial Average in 2006. So I wonder about F.

Quote from: usedcasting on December 20, 2006, 09:22:20 AM
Looks similar to the GM turnaround  model

Hi david, thanks for your review, great insights. Just wanted to clarify my comment about any similarity to GM's turnaround. What I believe is that Ford is attempting now what GM did over the past few years to regain it's presence in the automotive arena. GM certainly isn't out of the woods either at this point. I totally agree that this may not be the bottom for Ford but I will be watching.

Thanks again
uc.

Quote from: David Randolph on December 20, 2006, 11:15:23 AM
So, let's see, I see the analysts upgrades and general "hope" as bearish arguments, not bullish. The big money is in, wants to get out, so it is trying to bring the crowd's attention. F is up 1.7% today, but the trend is down.

See, this is the type of view I need to learn to take.  I figured the big money was trying to get the crowd's attention (that's why I wanted to go for the ride) but I didn't consider that it was so they could get out.  Interesting.  I'll have to think about this one some more.

Quote from: David Randolph on December 20, 2006, 11:15:23 AM
No, Metastock is a technical analysis software, it doesn't have any fundamental data. I get my Fundamental tables from www.alphatrade.com's "Fundamentals" service (they have fundamental data since 1994 for almost every stock listed, OTCBB included - they should pay me for this publicity ). Then I insert the values on Excel to get the fundamental graphs you see.

It's kind of hard work. I already put Ramsburg on the job to make this task easier, and although he came up with some excel formulas, there are many exceptions and it doesn't always work automatically. But he sure reduced the time of making one of these graphs by a half, as I was doing everything manually

As I said before, you're on the right track, keep up ! (your sector analysis looks promising, I still need to learn how it works, thanks for all you do).

I thought those charts looked familiar.  I also do some work with Excel to produce line charts but have done some experimenting with bar charts (some time ago).  This sector project I have going is not progressing as fast as I would like.  It takes a lot of time to figure out some of this programing which I'm sure Rams can attest to.  I have wanted to do some of my own chart creating with it also so let me do some digging and see if I can help figure out a tool that will make your job easier. 

Unfortunately, after some nice early gains, my entire portfolio sold off by the end of the day (damn GOAM! ) and F was the only stock that showed a gain.  I don't know how far this move will go but as long as it looks like it has legs, I'll try to stick with it.

Closed my position in Ford today at 7.31.  I don't think this is done going up but I found a better place for my money. 

Ford gets back above that 200 ma. Can it get back above that 50.

uc.

Ford toughs it out and gets back above the 50. Yes!

uc.

Ford tough is the motto today. Currently up 10 cents after a larger than expected loss reported. Wow!

uc.

P.S. Away for a week and glad to be back.   

Should be a good day for Ford  .
Up 6% pre-mkt

uc.



Ford narrows loss; shares on the rise
Automaker's North American business weaker in latest quarter
By Padraic Cassidy, MarketWatch
Last Update: 8:54 AM ET Apr 26, 2007

NEW YORK (MarketWatch) -- Ford Motor Co.'s first-quarter loss narrowed sharply from a year ago as overall sales surged, though losses in it North American auto operations mounted, hurt by lower revenue, financial results showed Thursday.
Investors liked what they saw, bidding the Dearborn, Mich., automaker's shares higher by 5.6% in pre-open trading to stand at $8.32.
Ford (F :
Ford Motor Company
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Last: 7.88+0.06+0.77%
8:47am 04/26/2007
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F7.88, +0.06, +0.8% ) said its loss came to $282 million, or 15 cents a share, narrower than the $1.4 billion, or 76 cents, generated in the year-earlier period. The latest quarter's loss included $113 million, or 6 cents a share, to reflect one-time accounting for restructuring efforts.
The company said total revenue, including its finance arm, rose 5.4% in the three months ended March 31, reaching $43 billion from $40.8 billion, helped by currency translations but partially offset by lower volume.
Analysts polled by Thomson Financial had forecast, on average, that Ford would post a loss of 60 cents a share and sales of $34.45 billion.
Chart of F
The loss in Ford's North America auto operations widened to $614 million from $442 million a year ago. The company cited unfavorable volume and mix, partially offset by cost reductions.
North American auto revenue fell about 8% to $18.2 billion from $19.8 billion.
"Our first-quarter results came in somewhat stronger than expected, but there are many uncertainties going forward. We remain focused on improving our quality, productivity and business performance," said Alan Mulally, president and chief executive, in a statement.
Ford also said it cut 18,000 North American positions during the March quarter. End of Story

F hit a new two month high of $6.00 on Friday representing a gain of 62% since April 4th