Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

2015 Could Be Ford's Best Year Ever

Currencies / US Auto's Dec 26, 2014 - 03:55 PM GMT

By: Money_Morning

Currencies

William Patalon writes: I've always been a "car guy."

Back in my high-school, college, and twentysomething years, the term was "motorhead."

I liked to soup up cars, did a bit of drag racing, and restored several antiques and classics with my Dad.

So I know cars.


And as I told Private Briefing readers in a column a few weeks back, I also know Ford.

I've been following the brand, and Ford Motor Co. (NYSE: F) itself, since my teen years. And I really stepped up my focus on the company – as an investment – when I became a journalist in the mid-1980s.

Late last month, I predicted that Ford would be one of the best stocks for 2015.

And a report that I came across yesterday bolstered my belief in my forecast.

Let's take a look…

It's Like the Financial Crisis Never Happened

U.S. sales of new cars and trucks will rise 2.6% to reach 17 million units in the New Year – the best showing since 2005, according to a new forecast by TrueCar, the Web-based auto-sales service. And that follows a year (2014) in which combined U.S. sales of new and used vehicles will rise 8.3% to reach $1.1 trillion – creating a momentum so strong that it will carry into the New Year.

"The overall buying power in the auto market sometimes isn't fully appreciated," TrueCar President John Krafcik said. "To put this in perspective, new vehicle revenue alone will surpass the value of new single family homes in the U.S. nearly three times [in 2014]. It's a remarkable year for the industry as both sides of the market are seeing notable growth and commanding strong pricing power."

Pricing power – a term that investors love to hear.

What it means is that there's so much demand for a product that the company making it can raise prices without scaring folks away. Pricing power provides an "operating leverage" that, in simple terms, means a company like Ford can make more money than it did previously on every vehicle it sells.

Ford has traditionally had some nice pricing power with its hot-selling F-150 pickup truck. But TrueCar forecasters are saying that car companies are going to enjoy even broader pricing power than in years past.

Combine that pricing power with forecasts for higher sales – some industry experts are predicting new car sales could match or exceed previous peaks in the 17 million range – and you're talking about a bullish year for the auto sector.

The "catalysts" are there in the form of a cheap gasoline prices and a surging U.S. economy.

U.S. Growth Will Be Better Than Expected

We all know what's been happening with energy prices. We've talked about the big slide in crude (and the money to be made there) in several recent Private Briefing reports.

And we've also talked to you about the strong economy.

But that's worth drilling into a bit more…

A brand-new forecast by Kiplinger's magazine calls for global growth to average 3.2% in the New Year – not bad, given the headwinds some regions are facing.

The U.S. economy is expected to grow at a 3% pace or better in 2015. Like the auto-sales numbers, that's the best annual growth rate since 2005 – up from an expected 2.2% this year.

Wages are rising, giving U.S. families more buying power. And falling food and energy prices – coupled with the lowest household debt-to-income ratio since 2002 – gives households more to spend.

Businesses will do their part, increasing spending on plants and equipment by an average of about 7%, up from 5% in 2014.

"We're in a boomlet here in the U.S.," Bob Baur, chief global economist for Principal Global Investors, told Kiplinger's.

And many consumers have been delaying a car purchase. According to Michael A. Robinson, our resident tech expert and editor of Radical Technology Profits, the average car on the road today is 11.4 years old.

"By tech standards that's ancient history – and technology is a relevant point of discussion with autos these days," Michael told me. "With cars more than a year or two old, we're talking no backup cameras, no in-dash infotainment systems, no collision-avoidance sensors, self-parking features, Bluetooth, or integrated GPS. That becomes an additional incentive to buy a new car or truck."

Analysts right now have a $22 high-water estimate on Ford. I'm using that "high" estimate because I believe some dour comments have been holding down that company's share price of late. A $22 target price computes to a 43% gain from recent levels. And with the recent 3.3% dividend, you'll be well-paid to wait.

Up Next
CEO Buys His Own Stock – Bill Says Shares Are Going Up 108%…

One year ago, on December 2, 2013, the CEO of a tiny defense contractor bought over 30,000 shares of his own company. The stock went up 30% in just over a month. Recently, this CEO snapped up even more shares. This time Bill expects the stock to pop by 108%. For full access to Bill's report on this incredible opportunity, click here

Source : http://moneymorning.com/2014/12/26/2015-could-be-fords-best-year-ever/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in