Bull of the Day: Ford Motor (F)


November 11, 2013 |

2013 has been a year of resurgence for the automotive industry, as sales have trended higher for much of the time frame. In fact, the latest monthly report showed that total vehicle sales stayed at an annual pace above 15 million for the sixth month in a row, suggesting a robust level of demand.

Foreign markets are also coming back strong—especially China and Europe—which is adding even more to the bull case for the automotive market. Thanks to this environment, a look to some of the top auto manufacturers might be a good idea, such as with Ford Motor Company (F - Free Report) .

Ford in Focus

Ford really needs no introduction, as it is easily one of the most famous carmakers in the world. Yet, what many might not know about the company is that its shares have been burning rubber as of late, with a YTD gain hitting 25%.

This is largely due to some of the positive trends outlined above, and strong demand for Ford cars and trucks. Although some might wonder if a run like this can continue in such a ‘traditional’ company, if investors look to analysts and their perception of F, there is plenty of reason to believe that Ford can drive even higher.

Ford Earnings: Under the Hood

Ford just released their earnings for the most recent quarter and crushed estimates. The company reported 45 cents a share in earnings, easily beating the consensus of 38 cents a share. This actually continues a pretty robust stream for F, as the automaker has beaten in all of the last four quarters, with an average beat of nearly 17%.

Thanks to this strong history and the bright outlook of the auto industry, analysts have been boosting their estimates for Ford in both the near term and the long term. The consensus estimate for both the current quarter and the next quarter has moved higher, while the current year-over-year earnings growth projections for both of these quarters stands at a double digit percentage rate.

The longer term outlook looks even more favorable, as not a single analyst has lowered their estimate for the current year or the next year in the past 60 days. In fact, the consensus for both time periods has risen by 5% in the past two months, further underscoring the bullishness in this top automaker.

Due to this pretty much universally bullish trend, Ford has earned itself a Zacks Rank #1 (Strong Buy). This means that we are looking for further gains out of Ford in the months ahead, and that their incredible run can definitely continue.

And if that wasn’t enough for investors, it is also worth pointing out that Ford is in great company too. The auto-domestic Zacks Industry is actually in the top 5% of all industries, and not a single one of the seven companies in the space has a rank worse than 3 (Hold).

Bottom Line

While the entire automotive industry is relatively favorable, it is important to remember that Ford is actually the only one—at time of writing—that has the top Rank, though there are others that have Ranks of 2 (Buy). Still, Ford appears uniquely positioned to benefit from the broad automotive recovery, and analysts are certainly backing up this claim.

So if you are looking for a great investment to play off of the boom in automotive sales, consider Ford. The company has a proven track record of beats at earnings season, and with double digit growth and a solid dividend (2.4%), this could be an excellent choice for months to come.

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