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The Razor’s Edge

2-Year Price History

Recent Price
52-Week Price
$1.01 – $8.79
Market Capitalization
$4.5 Billion
Dividend Yield
Most Recent Dividend

About Ford Motor Company

Ford Motor Company is considered to operate in the Consumer Goods sector. They specifically operate in the Automotive Manufacturers/Major business segment contained within the Automotive industry.

The company is a producer of cars and trucks combined. Its business is divided into two sectors: Automotive and Financial Services.

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.

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

At Ockham Research, we believe that there is extremely useful information to be gleaned from historical evidence. When a stock is out of line with historical norms it could definitely be a signal that it is overvalued or undervalued. But as proponents of the Efficient Market Hypothesis will tell you, the market is never wrong about stock prices because everything that can be known about a stock has already been priced in. However, in extreme cases, such as the Tech bubble in the early 2000’s or more recently the credit crisis demonstrates there are certainly times where historical evidence can be misleading. Episodes such as this do prove that times of great market correction either positive or negative can be driven by factors outside of fundamentals.

Well, what can you say about this market? No one likes to see the market going down so rapidly, but in times like these value investors should be cautiously opportunistic, as the market’s decline has certainly uncovered some great bargains. We are simply reiterating F’s Undervalued rating as of this week, as F’s sector has resisted the downturn to some extent. Our analysis of this stock is little changed since last week’s report, but please continue reading for further justification of our Undervalued rating.

First, an increase has occurred in F’s price from $1.80 as of 01/24/2009 to a price of $1.87 as of 01/31/2009. This increase of 3.89%, while not significant enough to cause a ratings downgrade at this time, does cause the attractiveness of F to decline slightly.

Second, since our last report, there have been no significant adjustments in earnings expectations or guidance.

F Stock Evaluation

We are reiterating our rating of Undervalued on F at this time. As described in the Recommendation Summary, we have not seen any additional guidance or change in expectations to F’s earnings, but we have seen a relatively significant increase in its share price of 3.89%. This increase in price is significant and should be noted as we look further into the fundamental picture of F below.

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 0.10x and the low end of the range at 0.05x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for F of 0.03x is well below its normal historic Price to Sales levels. At a price of $1.87, F is 61% 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

Looking at F specifically in their Cash Earnings capabilities, Ockham views F as significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for F to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 1.52 and a 0.79 low over the same period.

Now that F’s current price is $1.87 and its Price to Cash Earnings ratio is 0.31, we are very positive on its outlook from the cash earnings perspective. In fact, F is now trading a full 74% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why F has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.

F Dividends

When determining a company’s future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn’t imperative for F to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis. Because F is not currently paying a dividend we give them a neutral rating on the dividend portion of our analysis; however, be advised that because the company has a history of paying a dividend that means that the dividend has been discontinued. We are always cautious of a company that has discontinued paying a dividend as it generally suggests a financial weakness.

Peer Comparison


Ford Motor Company Industry Grouping

Company Ticker Market Cap (Ml) Latest
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding F) 2.13 1.85 » 15.82 0.22 0.20 » 1.64 10.33% 13.96%
*10 year range does not include current year values
Ford Motor Company F $4.5 Billion $1.88 0.31 0.19 » 4.60 0.03 0.02 » 0.37 1.08% 9.79%
Magna International, Inc. Class A Sub.Vtg MGA $3.2 Billion $28.49 2.95 2.54 » 9.14 0.12 0.10 » 0.60 15.98% 9.74%
Harley-Davidson, Inc. HOG $2.8 Billion $11.86 2.56 2.60 » 31.84 0.51 0.50 » 5.26 6.96% 32.30%
Navistar International Corp. NAV $2.1 Billion $30.01 2.07 2.13 » 19.41 0.15 0.10 » 0.46 15.00% 9.32%
Borg Warner Inc. BWA $2.0 Billion $17.49 2.87 1.85 » 11.12 0.30 0.29 » 1.15 14.30% 13.28%
General Motors Corp. GM $1.8 Billion $2.89 0.19 0.14 » 7.61 0.01 0.01 » 0.73 -0.61% 5.18%
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RazorWire™ & Community Discussion

Closing Bell
2/2/2009 3:18 PM
Closing Bell
Share from $14. The analysts there expecting the nation’s largest paper and forest products company to cut its dividend by mid-year. 13% comes out of the name as a barclays capital reducing FORD MOTOR to underweight from equal weight on increasing cash and concerns of slowing in international sales. >> thanks, dylan. Financials are expected to see more volatility this week with washington focused squarely on
Street Signs
1/30/2009 2:01 PM
Street Signs
Sales of new homes — these are figures released yesterday — were the worse since the 1960s. More companies announced mass FORD MOTOR company reported a huge loss in their quarterly earnings. Again, I think all of these demonstrate the need for congress and the president to work together to get something
Fox Business
1/29/2009 2:59 PM
Fox Business
Jobless claims soarinm d take a look at the dow, s&p and nasdaq. On the ss f and nasdaq as we FORD MOTOR feeling the burn untdoter nearly $6 billion in a that stock hit today. Jeff flock at ford headquarters and spoke to
Fox Business
1/29/2009 2:26 PM
Fox Business
They are now. >> david: phil flynn, I have never thrown you a question you’ve been unprepared for. You always have an answer for thank you, phil flynn. Good to see you. >> thank you, buddy. >> david: FORD MOTOR facing the worst year in the company history facing fourth quarter losses of $6 billion, and the auto maker still doesn’t plan to seek federal loans. And jeff flock off the
Fox Business
1/29/2009 1:45 PM
Fox Business
Keep an eye on the financials ’cause they really drive this market one way or the other. Back to you. >> nicole petallides, thanklp you there are the financialsap home3w builders, everything going in the same direction today. Including FORD MOTOR. FORD MOTOR burned through 5 and a half billion dollars in cash in just the three months that comprised the fourth quarter. They say it will cut 1,000 jobs in its credit union, credit
Power Lunch
1/29/2009 12:17 PM
Power Lunch
Smaller, fabulous vehicles, we have those vehicles we’re bring I think we have a comprehensive policy that includes the >> reporter: alan mullally ceo of FORD MOTOR company on a day they announced they burned through $5.5 million cash in the fourth quarter, but that’s an improvement, and most important they will not have to tap the federal government for a bridge >> very interesting.
The Call
1/29/2009 11:32 AM
The Call
You saw the front page of the you saw putin and the chinese right there together. Anyway, we’ll talk about that later. FORD MOTOR posting the worst annual performance in it’s 105-year existence. Details on what’s ahead for the nation’s second largest automaker, if you can stand to hear it, melissa. >> plus, today’s "call of the
Fox Business
1/29/2009 10:28 AM
Fox Business
Speed rails that it’s going to go to medicaid and repainting >> dagen: all right. Bad bank, wapt to talk about that coming up, but right now, speaking of transportation, FORD MOTOR company, a bigger than expected loss for ford in the latest quarter, but there are at least some signs of hope in this jeff flock is standing by in some frigid weather to break
Squawk On The Street
1/29/2009 10:12 AM
Squawk On The Street
Quarter. The company says it has sufficient liquidity. No plans at this point, as it has said all along, to draw on a bridge loan from the federal the company confirming that it will cut 1200 jobs at FORD MOTOR credit this year, that’s because there’s less jobs needed if fewer people are out buying vehicles. The uaw and ford agreed to end the job bank.
Fox Business
1/29/2009 10:09 AM
Fox Business
If it passes and fails, it’s their plan, they can’t be blamed for it. >> brian: rich edson in washington d.C., rich, thank you >> dagen: so much more news to cover this day, including that mega lost from FORD MOTOR. 14.6 billion dollars for all of and now, coming word that the finance chief there at ford says the auto maker is planning 4 billion dollars in structural consist cuts in ’09.
Money For Breakfast
1/29/2009 8:01 AM
Money For Breakfast
Let’s see where things are in the united states. We spoke yesterday morning, things were looking higher, right now things are looking lower in the u.S. Let’s look at the three things everybody’s focusing on, first of all, FORD MOTOR company posting their earnings just moments ago, just about an hour ago, a fourth quarter loss of that was excluding items this morning on the heels of gm and
Money For Breakfast
1/29/2009 7:35 AM
Money For Breakfast
Better than 93 in the most recent quarter. However a revenue of 5-1/2 billion at the bottom of the screen below the 5.7 billion that had bfoeecast. Watch 3m today. Maybe a stock on the move. >>> one stock already on the move is the FORD MOTOR company and it is moving ford shares are up by 7 plus% in the premarket after actually reporting a wider but you can take some good news or at least not some bad news from the comments coming
Countdown to the Closing Bell
1/2/2009 3:33 PM
Countdown to the Closing Bell
This is basically a — stock price will fall and while it steams to be materialize not guilty today’s trading session with iron mountain trading actually higher now. Moving lower a little while ago. FORD MOTOR giving bleak forecasts for 2009. Announcing within the last hour that it has hired goldman sachs to look at options for its breen briar unit.
Countdown to the Closing Bell
1/2/2009 3:00 PM
Countdown to the Closing Bell
Borrowing deals. So motor city madness really jumping on the stocks right now despite that negative news from ford. 16 and a quarter percent. FORD MOTOR, better by 16 cents. That’s a gain of 7% for ford. Crude up on a nasty combination of a couple of things. We have global forces, thick fog on our gulf coast delaying
Fox Business
1/2/2009 2:01 PM
Fox Business
Airlines, autos, shipping names staying strong strong today. Ford saying that it will sell fewer cars this year than last year. But you’re seeing healthy gains on FORD MOTOR shares right now. Gold making interesting picks. Look forward to in 2009. Saying discretionary names are poised for a rebound now that
Now Ford’s board is saying they won’t cut Mullaly’s $2million a year salary. Look, I am the first to defend paying for good talent. You can’t expect to run a successful enterprise without attracting good leadership. And that takes money…


C’mon, that’s for Good leadership. GM, F, Chrysler are barely keeping up. Now they are all rushing to build electric cars when gas is back to $1.74 a gallon. They just don’t get it. Cut costs, cut the union, or go bankrupt. Simple.
What about the amount of dealships around the country
7000 GM Dealers vs 1500 Toyota.

No wonder they have ahard time generating revnue with these type of fixed costs.
Ford is in the same boat (read: sinking ship) as GM. With the UAW coming out two days ago stating that they take NO RESPONSIBILITY for the demise of the auto industry in the U.S., it is all but certain that they will never give up getting paid an AVERAGE of $73/hour. And while that is their rate, US auto companies will never beat out US Assembled cars like Honda.
View All Ford Motor Company Comments

Key Fundamentals

F – Ford Motor Company Fundamentals
Price (2/2/2009) $1.88
Volume (2/2/2009) 30.7 Million
10 Day Average Volume 45.9 Million
13 Week Price Range $1.01 – $3.54
52 Week Price Range $1.01 – $8.79
LTM Revenue $161.2 Billion
Shares Outstanding (12/2007) 2.4 Billion
Market Capitalization $4.5 Billion
Shares Held By Institutions 1.7 Billion
Institutional Holders 615
% Shares Held By Institutions 72.60%
Earnings Per Share (EPS) ($1.38)
P/E Ratio n/a
Book Value Per Share
Gross Margin 22.00%
Quarterly Dividend 0.00
Dividend Yield 0.00%
Beta 1.80
Fiscal Year Ends December