3 Huge Reasons to Buy Ford Today
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Many investors can remember the horror stories associated with Ford (NYSE: F) just a mere two and a half years ago. At that time, the company was in turmoil. The hope that the motor company could hold on during the declining economy was hanging by a thread. Due to this loss in consumer confidence, its share price had plummeted to around $2 per share.
But, since that time, Ford has been on the rebound, reaching a share price as high as $19 per share just 24 months after it had bottomed out. The rapid rise to prosperity is not without its bumps in the road, as Ford has recently come back down to earth, currently selling at a slightly over $9 per share.
The most recent decline is in large part due to the stagnant numbers that are coming out of the U.S. automobile market. It was recently reported that sales of Ford vehicles in the United States in July declined four percent, from last year's numbers. Meanwhile, during the same time period, General Motors (NYSE: GM) also saw a significant decline in sales, dropping six percent in June from a year ago.
In the same report it was found that overseas competitors such as Toyota (NYSE: TM), fared much better as they saw a 25 percent increase in July sales and Honda (NYSE: HMC) sales jumped 45 percent.
As a result of these numbers, many investors have once again bailed on Ford, and its share price has dropped around $2 in the last three months.
In my opinion, the drop won't last long, as despite the stagnant numbers in the U.S. market, there is an abundance of positive news that will stabilize its share price in the coming months and send it soaring within the next year.
Canada on the Rise
With all the eyes focused on American sales, little attention has been given to the rise of Ford in Canada. It was recently reported that Ford sales in Canada for the month of July were the best in 30 years as it sold 27,490 vehicles.
The Canadian car market as a whole is seeing substantial growth, as it was reported that overall automobile sales for the year have totaled over 1 million, giving further optimism that more growth is on the horizon.
New Ford Focus Plant is Paying off Big in China
As for overseas sales, there are no more optimistic numbers then those being released in China. It has been reported that nearly 14.5 million cars were sold in China in 2011, 5.2 percent more than 2010 numbers.
Bolstered in large part by its new $490 million plant that began producing the globally popular Ford Focus, it was reported that Ford experienced record sales for the month of June. Passenger car sales rose 28 percent, which was significantly assisted by the 15,000 Focus sales that were made during that time period. This was the third month in a row that Ford experienced record sales in the Chinese market.
Although Ford has yet to gain significant ground on rival GM, who last year reportedly sold 2.5 million vehicles as compared to the 520,000 Ford sold, the success Ford is experiencing in such a short period of time will, in my opinion, continue to be a significant source of revenue for Ford moving forward.
Electric cars will be Ford's new bread and butter
The electric car craze is coming, and with Ford keeping its focus on producing advanced batteries instead of rushing less marketable cars into the electric car market, they have positioned themselves very well to profit in this field.
Ford has announced that they will be tripling their electric car production by 2013. Ford has also developed a lithium ion battery pack that is reported to fully charge in merely four hours, almost half as much time as it takes to charge the Nissan Leaf. Ford also intends to release their C-MAX Energi plug-in hybrid this fall, their first plug-in hybrid that only takes two and half hours to fully charge. The C-Max is expected to have a maximum range of 550 miles, which far exceeds the Toyota's Prius' model.
With all of these new developments, Ford has also recently announced a technological application that will only be available in the Focus and C-Max electric cars. This application, which is powered by MapQuest, will be able to direct electric car drivers to the nearest recharging station, a substantial benefit for drivers who wish to tap into one of the more than 9,400 stations that are currently operational across the U.S.
With Ford's newest developments in the electric car market, not only are they ready to capture a significant market share in the United States, but also across the globe as certain governments have put legislation into place that will significantly assist consumers in their purchase of electric vehicles.
Italy has recently reported that they will be offering consumers up to $6,149 in financial subsidies to purchase electric cars.
China, which is expected to reach 2 million in electric car output by 2020, has also added incentives for consumers to purchase electric cars that include exempting electric car purchasers from certain car restrictions that are enforced in some of China's largest cities. This policy will continue to push more Chinese consumers to electric cars and, with Ford's growing presence in the market, will allow Ford to make significant gains on its Chinese market share.
There is not a lot of time to waste if investors wish to take advantage of Ford's current bargain price. With its strong foothold in the United States, its growing numbers in foreign markets and its strategic positioning in the electric car market, Ford has set forth a course that will lead all those investors who take advantage now to a high dividend payout trip that will last for many years to come.
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