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Released on Tuesday, November 8, 2011, 11:30 AM ET
Pittsburgh, PA (SpeculatingStocks) - Ford Motor Co. (NYSE:F) is not a company we ever expected to be writing on, but hey, its got a low P/E which could mean that the company is trading lower than it should be given its earnings. Ford has a P/E of only around 6.47, while its earnings are $1.74 per share, resulting in a current trading price of $11.22 per share (11:30 AM EDT November 8th, 2011).
Ford is actually a rather volatile stock considering the market, running a volatility beta of 2.36, an interesting attribute for a company that is otherwise financially stable with a total debt to asset ratio of 1.59 and a current ratio of 1.24. Over the past 3 years Ford has not been faring well with positive cash-flows, but this year 10-Q have proven to show a reversal in that developing trend, the firm has a total net operating cash flow of $11.25 billion, and they have maintained a net profit after taxes for the past two years despite the recession.
Because the company is trading at a P/E of 6.47 this company seems to be trading rather low in comparison to its sector average of 12.04. Appreciating the stock value from its earnings with the sector average, Ford should be trading more around $20 or $21 a share. There are some possible reasons that the company is trading a bit low, including encroaching competition from giants like GM who are estimated to report a growth in earnings for the past quarter; however, Moody’s just recently upgraded Ford for their stock outlook.
Ford is a beast in and of itself , with a market capitalization of around $42 billion the company fits right into the mega firms, but it produces a small amount of return compared to its counter parts. But it would be hard to deny the heavy weight on the scale and that is Fords longevity. The company has been around since the turn of the century—last century that is—and it has revolutionized the automotive industry time and time again. Ford has been a cash cow for investors for years, and it could be a good place to make an investment if you are looking for stable returns. The firm has presented outstanding return on equity throughout the years totaling 755%.
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