Dynamic Wealth Report
Subscribe to the Dynamic Wealth Report

Were You Surprised By The FORD News?


The Dynamic Wealth Report
November 3, 2009



Every once in a while, the market surprises people.  It doesn’t happen very often, but when it does… the results are jaw dropping.  Yesterday was a day like that.  The big news was all about Ford (F).

The company reported quarterly earnings.  To say they SHOCKED the Street would be an understatement.  However, one person wasn’t surprised by the news… but more on that later.

What did Ford do?

They surprised everyone by announcing third quarter earnings of $1 billion.

Then they went on to say they’d be solidly profitable in 2011.

I dug a bit deeper into their numbers and I liked what I saw.  Ford’s been cutting costs and capturing more market share… 2.2% more to be exact. And the “Cash for Clunkers” program helped overall sales.  They’re raising prices (mainly by removing incentives), and material costs are lower.

Ford made just under $1.0 billion… about $0.26 per share.  Not bad considering analysts were expecting a 12 cent loss.  Talk about an upside surprise!

Even Ford’s cash position is improving.  The CFO indicated they took in more than $1.3 billion in cash this quarter… better than the $1.0 billion cash outflow last quarter.

-------------Sponsor-------------
Where Can You Turn $300 Into $1.3 Million Right Now?

Our own small-company specialist, Robert Morris, has found a way to 'sniff out' tiny penny stocks on the verge of a major breakout.  And the timing for this has never been better.

You see, the system takes advantage of an obscure SEC regulation that sends penny stock prices through the roof.

We've seen some stocks gain 852%... 5,450%... even 17,496% in no time flat.

Click here for the details...
-----------------------------------

This is a huge about-face from last year.  In 2008, it wasn’t looking good for the company.  They had lost $14 billion.

That’s all changing now.

Ford’s managed to avoid both a government bailout and bankruptcy court.  And now it looks like they are on the right track for significantly improved business results.

Clearly the turnaround for Ford happened more quickly than anyone expected.

Everyone seems to be surprised, but I’m not.

On March 20th, I published an article all about Ford… “Are You Crazy To Buy Ford’s Stock Right Now?”

I noted a bunch of things helping improve the company’s performance.

First, they were restructuring debt.  Trading debt for stock is always a great way to cut costs.  Second, the unions had agreed to a wage and benefit freeze.  And third, I noted they were poised to benefit as other car companies entered bankruptcy.

I said bankruptcy would hurt the sales of the other automotive companies and help Ford sales… and it did.

I told people to buy Ford when it was trading at $2.50 a share.  Just look how it’s performed.

Ford Chart

The stock soared to a new 52-week high of nearly $9.00 a share in August.  Now it’s trading between $7.00 and $8.00.  Since I recommended it, this little lottery ticket’s returned over 180% in just a few months.

So does this mean we should rush right out and load up on the stock?  Not so fast.  The easy money’s already been made.  Now, the company needs to execute in a tougher environment.  No more Cash for Clunkers.  No more debt exchanges.  No more help from the unions.

Yep.  You heard that right.

Union workers recently rejected a new work agreement.  The fear of Ford folding is gone.  Now it’s back to business as usual with the unions.

It’s not a good sign.

It just goes to show you how difficult the car industry is.  If you were fortunate enough to record a big winner with Ford, now’s the time to take your money off the table.  While the stock should head higher over the next few years if they avoid a union strike, I just don’t see it climbing more than a few points.

There are many other better places to put your hard earned money.  As a long term investment, Ford is not the stock you want to hold.


IPO Update 

AGA Medical (AGAM) priced their IPO last week selling more than 13 million shares for $14.50 each.  However, the medical company has been unable to hold on to its lofty price, falling below $13.50 a share just a few days later.  Not a good sign for the overall IPO market.


Print Page Print Page                                                 Bookmark DWR  Bookmark Us

Issue Date:
 Tuesday, November 3, 2009


Notable Highs and Lows

•  Banco Marco (BMA) hit a 52-week high of over $31.  The Argentina-based bank is close to closing their acquisition of Nuevo Banco Bisel.  Their market cap is now over $1.8 billion.

•  Encore Acquisition (EAC) hit a new 52-week high of just under $45.  The natural gas and oil acquisition company has a market cap of just over $2.3 billion.

•  Harris (HRS) hit a 52-week high of just over $45.  The company received almost $300 million in contracts from the Navy and the US State Department.  Their market cap is now over $5.5 billion.


Quote of the Day

"Prosperity is a great teacher; adversity a greater."

                          -
William Hazlitt

 
Special Offer

China Stock Insider


Top Global Markets

Country Gain
Russia 114%
Argentina 98%
Sri Lanka 98%
Turkey 76%
Indonesia 75%
*Performance from 1/1/09


Worst Global Markets


Country Loss
Japan +10%
Finland +10%
Germany +12%
France +13%
Switzerland +13%
*Performance from 1/1/09


Recent Articles

Buy Silver At A 71% Discount!
Monday, November 2, 2009

How A New Perspective Can Put More Money In Your Pocket
Friday, October 30, 2009

Reports Of The Dollar’s Death Are Greatly Exaggerated
Thursday October 29, 2009