F Stock Report

2-Year Price History

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A Word Of Caution

The Ockham Research Team has placed an alert on this security because there have been significant developments associated with Ford Motor Co (F). Eventually, these externalities may have an impact on our valuation but these recent events have not yet been fully factored into our analysis.

Please take a moment to look at the RazorWire feed on the right hand side of the report. Each mention of Ford Motor Co on business television will be displayed to the right of the report. This should help bring you up to speed on any major issues they are facing right now.

Of course, you may proceed to review our research report for this security, but please be aware that our model may not reflect these significant factors surrounding this company as our data sources are still being updated. This alert shall remain in effect until the situation surrounding this security normalizes substantially.

Therefore, (and as always), check additional sources and available information regarding F before making an investment decision.

Ockham's Rating

F Revenue

As a value investing shop, we are interested in seeing how F's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 0.17x and the low end of the range at 0.08x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for F of 0.09x is well below its normal historic Price to Sales levels. At a price of $5.89, F is 27% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.

F Cash Earnings

F is not forecasted to produce positive Cash Earnings this year, based on recent performance. This is not a positive situation, as we would always prefer that a company is producing cash every year. However, it is important to recognize that not all companies or types of companies have the goal of producing positive Cash Earnings either early in their business cycle or following significant turnaround changes. When looking at F, we hesitate to be overly negative on the company, but it is of concern that the company is not profitable at this time. Let's face it, companies cannot remain unprofitable for very long before a change has to be made. This could mean further restructuring or corporate event such as selling assets or spinning off divisions, at any rate a company with negative cash flows is not one that often makes a great investment unless you can acquire it at an extremely depressed price.

F Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.