America’s greatest turnaround story looks like it’s stuck in the mud. Shares of Ford Motor Co. (NYSE: F) raced from under $2 in early 2009 to above $18 in early 2011. A move toward the $25 mark started to become the next target for many analysts, myself included. Instead, shares have drifted steadily lower and now trade below $15. Even at that lower level, shares are heavily shorted. Many analysts clearly expect the stock to fall even further, but their logic looks flawed. A… Read More
America’s greatest turnaround story looks like it’s stuck in the mud. Shares of Ford Motor Co. (NYSE: F) raced from under $2 in early 2009 to above $18 in early 2011. A move toward the $25 mark started to become the next target for many analysts, myself included. Instead, shares have drifted steadily lower and now trade below $15. Even at that lower level, shares are heavily shorted. Many analysts clearly expect the stock to fall even further, but their logic looks flawed. A commodity drag After losing a cumulative $7.5 billion in 2008 and 2009, Ford earned a hefty $6.7 billion ($1.91 a share) in 2010. By late last year, analysts started to wonder if $2.50 a share or even $3 a share in profits might be possible by 2012. Now a series of headwinds have altered that view. Short sellers increasingly aver that Ford’s profits may actually drop in 2011 and 2012. They note that commodity prices are rising even faster than Ford can increase prices. What these bears are missing… Read More