TSLA - Ford In Focus: Solid Business With Issues To Fix
2024-04-18 18:30:41 ET
Summary
- Ford Motor Company is focusing on traditional segments and scaling back on electric vehicle production due to challenges in the EV space.
- Concerns regarding the debt load and struggles in establishing a foothold in the EV market are valid but overstated.
- I am concerned that Ford's stock could represent a value trap. Declining inventory turnover, gross margins, and stagnant market sentiment complicate the investment decision.
- Therefore, I assign a "Hold" rating to this iconic carmaker.
Introduction & Investment Thesis
I recently published an article about Tesla ( TSLA ) and argued that beyond all the confusion about what it can achieve in the future thanks to its technology, it is essentially a car company. The major difference is that it solely focuses on electric vehicles, while its more traditional competitors mainly sell internal combustion engine [ICE] or hybrid vehicles, seeing EVs as a venture.
As I discussed the problems awaiting Tesla in the EV space, I wanted to have a look at the traditional carmakers as well. And today, I am analyzing one of the oldest and most iconic carmakers in the world, with a history going back to the early 1900s. That company is the American symbol Ford Motor Company ( F )....
Ford In Focus: Solid Business With Issues To Fix