Ford Hitting High Levels, is it Still a Screaming Buy?

  • MH192’s number three main wheel burst during take off, says Hishammuddin – Bernama
    MH192’s number three main wheel burst during take off, says Hishammuddin – Bernama

    Preliminary investigation findings on the Malaysia Airlines (MAS) flight MH192 incident has revealed that the number three main wheel of the aircraft had burst during take off. Acting Transport Minister Datuk Seri Hishammuddin Hussein (pic) said the aircraft was currently grounded at the MAS Engineering facility in Kuala Lumpur International... …

  • Bible banned from Pahang hotel rooms – Bernama

    The Pahang Islamic and Malay Customs Council (MAIP) has prohibited hotel proprietors in the state from placing religious reading materials of other religions other than Islam in their rooms. According to MAIP deputy president, Datuk Seri Wan Abdul Wahid Wan Hassan, a letter of prohibition on the matter had been sent to 147 hotels across the... …

  • Pre-lim report to ICAO not public, yet

    Malaysia has yet to decide on whether the preliminary report on the MH370 incident submitted to the International Civil Aviation Organisation (ICAO) will be made public.   "We have issued the preliminary report. We've sent it to ICAO but we have not made a decision to release to media or the public," Department of Civil Aviation Chief Azharuddin Abdul Rahman said during a press conference in Kuala Lumpur.   Asked again on why it will not be released to public, although it is common practice, …

  • Take second job to tackle household debt, urges AKPK – Bernama
    Take second job to tackle household debt, urges AKPK – Bernama

    The Credit Counseling and Debt Management Agency (AKPK) has urged Malaysians to take a second job to help them tackle the high rate of household debt. Chief executive officer Koid Swee Lian (pic) said those in the teaching line, for example, could give extra classes to earn more money. "Teachers could earn more money by giving tuition to... …

  • International team probing MH370 to be finalised next week, Hishammuddin says
    International team probing MH370 to be finalised next week, Hishammuddin says

    KUALA LUMPUR, April 23 — Malaysia expects to finalise by next week the list of members on the independent team of experts commissioned by Putrajaya to carry out an extensive probe on the... …

  • Absolute power corrupts absolutely, Dr Mahathir reminds current leaders
    Absolute power corrupts absolutely, Dr Mahathir reminds current leaders

    Malaysian leaders have been reminded not to look down on the public’s capability to topple a corrupt government as what had happened in the Middle East during the Arab spring, warned Tun Dr Mahathir Mohamad (pic). In his latest blog posting today, the country’s longest serving prime minister said that monarchs and dictators in the Middle East... …

One of the most difficult things for an investor to do is to buy when a stock is up. Everyone loves a sale, and no one wants to pay full price.

When it comes to shopping, that makes sense. However, there are times when it comes to stock picking that one needs to pay full price. The reason is that stocks can continue moving up in price, which ends up being a situation in which the previous “full” price was actually a “sale” price.

Let’s talk about Ford Motor Co. (NYSE: F). Ford’s stock price has been on fire over the past year. Every time it moves higher, I hear people saying “yes, but I want to buy on a pullback” and it never comes.

Taking a look at the fundamental situation, readers who follow the market and the economic data already know that car sales are rocketing up. With vehicle sales moving up from approximately 10 million units in 2009 to 16 million units estimated for this year, that is a huge jump in demand.

Now that the Federal Reserve is keeping interest rates low for an extended period of time and not reducing their asset-purchase program, this is a positive to several sectors. Obviously, most vehicle buyers pay through financing, and lower rates are attractive there. But the housing recovery is also based on interest rates, and the more homes that are being built, the higher the number of pick-up trucks needed to work on various construction sites. Ford produces one of the top pick-up trucks in the industry with solid operating margins.

Ford has made massive changes since CEO Alan Mulally came to the helm. His leadership has been nothing short of extraordinary. Unfortunately, he will be leaving the company at some point, but the structural changes he made will last for many years.

The stock is trading at 10 times estimated 2014 earnings, which is quite attractive since we believe both revenue and earnings will exceed that figure. Another factor most people aren’t factoring is Europe. That continent has been extremely weak for many years, but over the past few months new data is showing that Europe is actually starting to pick up steam.

When investing, you have to know the existing situation and the potential catalysts. Ford is continuing to grow, yet the stock trades at an attractive multiple and offers a forward dividend yield of over 2%. With interest rates set to remain low around the world, we think the environment remains attractive for the company.

 Ford Hitting High Levels, is it Still a Screaming Buy? image Ford Sept 2013 600x283 Ford Hitting High Levels, is it Still a Screaming Buy?

Ford 1 Year Chart

You don’t have to be an expert in technical analysis to know this chart is NOT one to short. While people are hesitant to buy at the highs, note that in early May the stock was also hitting a previous high point, which it quickly blew through.

Is a pullback possible?

Of course it is, considering the stock has almost doubled in one year. No stock can keep up that pace forever.

The key is to buy a stock without rushing into a trade. Also watch the trendline, because if that were to break, the stock would most likely drop to the 200 day moving average.

With a stock like Ford up so much, yes there is even more upside potential, but one has to be alert to any change in sentiment. With some investors up 70% over the past year, any sign of trouble and they’ll be headed for the exits. Trading Ford, as with all stocks, an investor needs an exit strategy and a stop loss.

This is a cursory look at Ford Motor Co. (NYSE: F) and we are not making any specific buy or sell recommendation but merely voicing our opinion of the current situation. Each individual investor must conduct their own due diligence of both the company, the market sector as well as their own financial situation and risk parameters.

Originally published on BehindWallStreet.com

More Business articles from Business 2 Community:

Follow @YahooMalaysia on LINE for daily news updates.

Comments on Yahoo pages are subject to our link to Comments Guidelines. You are responsible for any content that you post. Yahoo is not responsible or liable in any way for comments posted by its users. Yahoo does not in any way endorse or support comments made by its users.

  • MH370 passenger’s partner tells of strange email from sacked Fox officer The Malaysian Insider
    MH370 passenger’s partner tells of strange email from sacked Fox officer

    The partner of an American passenger aboard the missing Malaysia Airlines flight MH370 has spoken about how a Fox executive who was recently sacked by the news station had contacted her offering to raise funds on her behalf. Sarah Bajc, whose partner Philip Wood is among the 239 people on board the missing plane, told the Sydney Morning Herald... …

  • Dr Ling’s son chose wine over woman, court hears The Malaysian Insider
    Dr Ling’s son chose wine over woman, court hears

    The son of former MCA president Tun Dr Ling Liong Sik today reached an out of court settlement with his ex-girlfriend in a breach of contract suit over seven properties registered under their joint names. Ling Hee Leong and businesswoman Teh Chee Yen agreed to settle out of court after he took the stand briefly and testified that he had chosen... …

  • MB: Only 29 days of water left in Selangor Malaysiakini

    Although heavy rain led to flash floods in parts of the Klang Valley yesterday, the Selangor government has said that taps will run completely dry in 29 days if rationing is not continued. "For now, we must continue with rationing as the level at the main dam, the Sungai Selangor dam, is below the critical level and can only last 29 days if rationing is not conducted," Menteri Besar Abdul Khalid Ibrahim said in a statement.   "We really hope the rakyat understands this situation and supports …