# Have you bought any Ford, lately?



## indexxx (Oct 31, 2011)

Any opinions on Ford? Recent news predicts heavy losses in Europe in 2012. Wondering if I should get out and enjoy my profits...


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## Oldroe (Sep 18, 2009)

I was talking to a buddy about Chrysler and learned they are selling trucks with 96 month financing.

That's great today but hardly sustainable, 4-5 years from now when there customers learn they still 15k on a truck worth 5k it will be bad.

Check Ford financing.


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## GreenAvenue (Dec 28, 2011)

I'm sticking with Ford for now, this kind of 'news' is heard about all stock imo


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## Oldroe (Sep 18, 2009)

It's bad news when you fall in love with stocks.


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## Gumball (Dec 22, 2011)

Oldroe said:


> I was talking to a buddy about Chrysler and learned they are selling trucks with 96 month financing.
> 
> That's great today but hardly sustainable, 4-5 years from now when there customers learn they still 15k on a truck worth 5k it will be bad.
> 
> Check Ford financing.



Oldroe, a company offers 96 month financing, thats great, tell me what % of sales it represents, then tell me if its sustainable or not, it could be 2% of total purchases, hardly a cause for concern


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## Ethan (Aug 8, 2010)

Oldroe said:


> That's great today but hardly sustainable, 4-5 years from now when there customers learn they still 15k on a truck worth 5k it will be bad.


If you can find me a 4-5 year old F-150 for $5k I'd buy it in a heartbeat. There are 41 4-5 year old F-150's within 100 km of me, the cheapest one is $13,998.

http://www.autotrader.ca/a/pv/Used/...,11,10,9&yRng=2007,2008&st=1&rprv=False&srt=4


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## Oldroe (Sep 18, 2009)

You guys are just funny. Head down to the dealer with a 5 year old Ram still owning 15K on it and see what they will do for you.

And buddy from Windsor should no better than fall in love with Auto Sec.

I wish every car company stock was $100 but $1 is more likely.


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## Gumball (Dec 22, 2011)

Oldroe said:


> You guys are just funny. Head down to the dealer with a 5 year old Ram still owning 15K on it and see what they will do for you.
> 
> And buddy from Windsor should no better than fall in love with Auto Sec.
> 
> I wish every car company stock was $100 but $1 is more likely.


Like Ethan said, find me that truck RAM or F150 for 5k and I will gladly buy it off you. Incase you havent noticed F150 and RAM are 2 of the top 10 best selling cars in Canada.

Just because 96 month financing is offered does not correlate to that company being in trouble, I dont see your logic there? Do you have any facts regarding this financing? If you said it made up X % of sales then maybe you have a point, until then, i dont buy it.


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## hystat (Jun 18, 2010)

you guys can battle it out over this one:


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## Ethan (Aug 8, 2010)

That's 6 grand, not 5 grand. That also has nearly 200,000 kilometers, not typical for a 5 year old truck. If you take all Ford truck sales that are financed over 96 months, then further filter it by trucks that get driven 40 kilometers per year, you will be looking at a very tiny pool. I highly doubt this could have a material impact to Fords statements.


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## hystat (Jun 18, 2010)

Ethan said:


> If you can find me a 4-5 year old F-150 for $5k


That's $5900 retail asking price. You can get it for $5K. 
The discussion was about the wholesale value of a truck that someone is making payments on. 

200K is very typical for a 5 year old p/u. That's only 40k/year. 

a dealer would offer $3500 for that truck on trade.


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## hystat (Jun 18, 2010)

Ethan said:


> If you can find me a 4-5 year old F-150 for $5k I'd buy it in a heartbeat. There are 41 4-5 year old F-150's within 100 km of me, the cheapest one is $13,998.
> 
> http://www.autotrader.ca/a/pv/Used/...,11,10,9&yRng=2007,2008&st=1&rprv=False&srt=4


someone could make a killing loading up transporters full of Ontario pickups and driving them to Saskatchewan. 
check this pretty one - 74K on it
http://www.autotrader.ca/a/Ford/F-150/KITCHENER/Ontario/19_5075972_/

what would that sell for in SK, $20,000?


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## Ethan (Aug 8, 2010)

hystat said:


> That's $5900 retail asking price. You can get it for $5K.
> The discussion was about the wholesale value of a truck that someone is making payments on.
> 
> 200K is very typical for a 5 year old p/u. That's only 40k/year.
> ...


40k/year is typical? That's over 100 km every single day of the year.

I searched autotrader and found not a single f-150 that was 2007 or newer and under $5,000. The cheapest I could find was the truck you listed (that truck is also 2wd, there is no way a 2wd 2007 f-150 has $15 k left on an 8 year loan). Given autotrader has 1,800 year 2007 and 2008 f-150's listed for sale, and the range of asking prices is $5,900-$48,500, I don't think the typical wholesale value of a 4-5 year old truck is anywhere near $5,000.

The discussion was about whether the 96 month leasing option exposes Ford to significant credit risk. Filter Ford sales by the following criteria:

1. Vehicle is financed
2. Vehicle is financed through Ford
3. Vehicle is financed on a 96 month term
4. Vehicle is worth significantly less than the loan outstanding
5. Vehicle's owner is defaulting on their payments

I doubt that filter would pull up many results, and I further doubt the results of that filter would pose any material risk for Ford.


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## Ethan (Aug 8, 2010)

hystat said:


> someone could make a killing loading up transporters full of Ontario pickups and driving them to Saskatchewan.
> check this pretty one - 74K on it
> http://www.autotrader.ca/a/Ford/F-150/KITCHENER/Ontario/19_5075972_/
> 
> what would that sell for in SK, $20,000?


I'd easily pay $8,400 for that truck if it was in Saskatchewan. Damn, that's cheap.


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## Oldroe (Sep 18, 2009)

You guys are funny.........and I wish you were investing in my company.

The sales crush is 3-5 years after they start writing 96 month financing, so you have that amount of time to learn about your company.

You love your company and it will burn you Good Luck.


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## Gumball (Dec 22, 2011)

Oldroe said:


> You guys are funny.........and I wish you were investing in my company.
> 
> The sales crush is 3-5 years after they start writing 96 month financing, so you have that amount of time to learn about your company.
> 
> You love your company and it will burn you Good Luck.


no one is in love with a company or out of love here, the only question is your logic of how OFFERING 96 month financing correlates to a doomed company - when you do not know what % of sales this represents. IF you had facts from your "buddy" that stated they are writing 80% of sales over 96 months there would be cause for concern. Many OEMs offer 84 / 96 month financing, it doesnt mean every car they sell is done with this type of financing... I would venture to guess this take rate is quite low. I am not trying to argue with you, I am interested in your logic.

I think Ford and Chrysler will do well over the next 3-5 year, due to the SAAR in the USA finally getting back to healthy levels as well as the fact that these two OEM's mentioned (FORD CHRYSLER) have been gaining market share and gaining sales by offering great product consumers demand.

anyways, hopefully they will avoid that "sales crush"you speak of, but only time will tell, good luck to y'all!


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## indexxx (Oct 31, 2011)

Gumball said:


> no one is in love with a company or out of love here, the only question is your logic of how OFFERING 96 month financing correlates to a doomed company - when you do not know what % of sales this represents. IF you had facts from your "buddy" that stated they are writing 80% of sales over 96 months there would be cause for concern. Many OEMs offer 84 / 96 month financing, it doesnt mean every car they sell is done with this type of financing... I would venture to guess this take rate is quite low. I am not trying to argue with you, I am interested in your logic.
> 
> I think Ford and Chrysler will do well over the next 3-5 year, due to the SAAR in the USA finally getting back to healthy levels as well as the fact that these two OEM's mentioned (FORD CHRYSLER) have been gaining market share and gaining sales by offering great product consumers demand.
> 
> anyways, hopefully they will avoid that "sales crush"you speak of, but only time will tell, good luck to y'all!


Thanks for getting back on topic- I have no love for Ford at all- I was interested in opinions of the stock potential. Which leads me to comment on the 96 month financing; it's probably great for Ford's banking side, which drives a huge part of their revenue.


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## Doug2000 (Apr 6, 2011)

*Financing*



Gumball said:


> Oldroe, a company offers 96 month financing, thats great, tell me what % of sales it represents, then tell me if its sustainable or not, it could be 2% of total purchases, hardly a cause for concern


Here in Canada, we're more interested in what we're paying for a vehicle, total price is on the window sticker. In California, the only price on the sticker is the monthly cost. The Americans walk onto a car lot only concerned with lowest possible monthly payments.
I have a friend who bought an Avalanche, paid cash, and it took 30 minutes of arguing to get the invoice price for the truck, they kept pushing Financing. 
2% in Ontario maybe, 35% in the USA will take 96 monthly payments.


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## KaeJS (Sep 28, 2010)

Time to buy?


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## m3s (Apr 3, 2010)

Wish I had a video of the brand new Focus RS catching on fire right in front of me this weekend. Pretty good representation of the stock. It stunk bad too.


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## HaroldCrump (Jun 10, 2009)

Name any car and we can find a video of it burning somewhere, sometime.
YouTube is wonderful, innit.
No telling what we can find on it these days.


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## KaeJS (Sep 28, 2010)

Company is garbage, but no doubt it should hit $10.00/share again.


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## m3s (Apr 3, 2010)

When a brand new car catches on fire in front of you, it makes a different statement than a youtube video. Just a bad omen, if anything, or a comment in jest. My friend's new truck also burnt down this week, but he didn't keep the exhaust from dry grass, different story from a spontaneous combustion.


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## PMREdmonton (Apr 6, 2009)

I think Ford is a good company that is producing good products but is going through a bit of a rough stretch due to the European recession and they don't yet have a good stranglehold in the emerging markets. Overall, I really do believe in this company and Mulally will get their problems sorted out. They have already started turning huge operating profits, huge free cash flows, greatly diminished their debt load, regained investment grade credit status and re-instated a dividend.

I suppose it could go down further but here is probably a good entry point. Many cyclical industrials are just being pounded.

I think some other good choices right now are ABB, SI, CMI, CAT, DDAIF and VLKAY. GM's numbers are tempting but their overall operating margins are still pretty thin and they are mostly still just benefitting from government largesse after the bailout they received with no debt plus the ability to maintain their tax credits. So I do think there are several good plays in this space as they are all quite beaten up at the moment.


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## Andrej (Feb 25, 2010)

KaeJS said:


> Company is garbage, but no doubt it should hit $10.00/share again.


Perhaps you can elaborate?


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## KaeJS (Sep 28, 2010)

Andrej said:


> Perhaps you can elaborate?


I can try my best to elaborate, but it's more just a feeling I have because:

Everyone knows foreign cars are better and the US isn't in the best position right now.

However, it will hit $10.00 again because people think it's worth that.

Just like how RIM is garbage. It's a dead company. Everyone knows AAPL is better.

All I'm saying is that by "garbage" I mean I wouldn't keep it as a long term hold. I would only trade the stock.


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## PMREdmonton (Apr 6, 2009)

I disagree that Ford is garbage as a company. I like Daimler and Volkswagen better as investments but Ford is not a garbage company.

The key to Ford unlocking its value is re-establishing Lincoln as a luxury carmaker. The halo from the Lincolns as well as the higher margins will make Ford a much better investment overall. I happen to think they can do it so I do like the company especially at this valuation. I bought around 10.50 last summer and then sold around 12.00 earlier this year. If I had some free money in my RRSP I might dive in. I am still a bit worried about cyclicals in the short-term and there could be another leg down but I think there is value there.


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## Mall Guy (Sep 14, 2011)

Try buying the top end F150 4x4 with all the trimming in St John's, NL . . . local dealer put in for 400 units, gone 75, all pre-sold . . . $70,000


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## Andrej (Feb 25, 2010)

Regardless of whether imports are better that domestics is irrelevant. There will always be a huge market for domestics. There are just some consumers that will never buy an import. In the last 5 years or so, Ford has vastly improved the quality and appeal of their vehicles. That coupled with their much improved customer support and service means that they will gain market share and keep it as well.


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## KaeJS (Sep 28, 2010)

^ True in everything you say.

But, look at the numbers. Ford's increase in sales (although 7%) was a lot lower than the others companies, especially the foreign ones. 

Like I said, it's great for trading. I'm weary about holding out for the long term, though.


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## riseofamillionaire (Feb 23, 2012)

Ford is so big it's hard to move the needle. It worked as a turnaround play in 09. The only way you can make big money now is if the auto cycle comes back in a meaningful way, which it might. On product and models alone they are one of the premier auto makers out there. Maybe a move to 20 over the next 3-5 years if the auto sector continues momentum.


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## PMREdmonton (Apr 6, 2009)

The auto sector is in recovery because people have put off buying cars for a long time and their cars are wearing out. They may buy something cheaper, those at the lower end of the totem pole may buy used but the public needs some new cars soon.

However, there are many ways to play this:

Base metals
Aluminum
Car part manufacturers
The car companies themselves.

I actually wonder if the best way to play this isn't Aluminum. Alcoa has been bludgeoned into submission and they are running at only about 55% capacity presently. However, new cars are using more and more aluminum to decrease weight so they can meet CAFE standards for fuel efficiency. There is also a supercycle ongoing in commercial airlines which also use huge amounts of aluminum in each plane. If you add them together it is easy to see a big increase in demand coming which should be a boon to Alcoa who has had to deal with a number of years of low demand for Aluminum and higher costs for energy and other inputs. This could be a good turnaround story.

Titanium metals may also be another good metal to take advantage of the airplane supercycle. TIE has been beaten into submission. The CEO has been buying back stock ferociously.

Disclosure: I haven't owned any of these stocks. I have owned Ford before and might buy again but I'm still leaning to VLKAY or DDIAF.


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## Toronto.gal (Jan 8, 2010)

KaeJS said:


> Company is garbage, but no doubt it should hit $10.00/share again.


Happy to have made 70% returns on a 'garbage company'. :rolleyes2:

Buffett’s Berkshire Hathaway may have bought shares in GM, but I prefer F.

I bought shares 2.5 years ago at about $10 & sold a % 11 months later for 70% profit [traded it numerous times since then], and glad to be buying again at same prices as in 2010!

Despite competition, why I like F: price/upside potential/expansion in emerging markets where IMO, there is room for all key players.
http://corporate.ford.com/our-compa...estor-news-detail/global_expansion_and_growth

I agree as others have said, that there are various ways to indirectly invest in the auto sector [metals/auto parts, etc.], if owning shares directly is not comfortable for some.

Oh, and I also drive a Ford!


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## Gumball (Dec 22, 2011)

KaeJS said:


> ^ True in everything you say.
> 
> But, look at the numbers. Ford's increase in sales (although 7%) was a lot lower than the others companies, especially the foreign ones.
> 
> Like I said, it's great for trading. I'm weary about holding out for the long term, though.



KaeJS I think part of the reason Ford's sales increases are lower than other companies is coming from the fact that they are offering less incentives and focusing on making a profit, and they have been doing a good job of this. And by comparings Fords YOY increase in sales to the imports doesnt mean a thing, if you remember the earthquake in Japan a year ago meant the imports had nothing to sell, so naturally their sales increases this year will seem higher.

I think Ford is set to have a great year, check out the link below on the best selling vehicle in north america for over 30 years now, this is Fords cash cow and in my opinion will help increase their profitability on this side of the pond, now in Europe, that may be anyones guess....

http://www.at.ford.com/news/multimedia/Pages/default.aspx?t=v&n=891


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