Ford Motor Company (F) is Steering Ahead

Page 1 of 2

Ford Motor Company (NYSE:F) posted strong February sales numbers with 9% year over year increase, outpacing the overall U.S. auto industry growth of 4%. This is the highest growth rate amongst all the major players in the U.S. auto industry. Ford Motor Company (NYSE:F)’s numbers were lower than the 11.9% that analysts at TrueCar.com were expecting, but this does not take anything away from the company. Rather, the solid results reinforce my faith in Ford Motor Company (NYSE:F)’s solid growth trajectory. Its valuation remains very attractive, and offer a solid proposition for the investors.

Ford Motor Company (F)

The U.S. auto industry trends

There was significant momentum in the sale of new cars and trucks in the U.S. The industry was facing strong headwinds from soaring gas prices, which rose to $3.78 per gallon in February, as well as higher social security taxes which are denting people’s disposable income. Despite the odds, vehicle buyers were not deterred and volumes rose a solid 4%. Annualized sale of cars and trucks was pegged at 15.4 million, higher than the 15.1 million expectations of economists polled by Thomson Reuters.

February was the fourth month in a row where the annualized sales mark was above 15 million units, reflecting a steady recovery in market conditions. It is estimated that the average age of a passenger car on the U.S. roads is around 11 years, and many are due for replacement sooner or later. This makes a solid case for the prospects of the U.S. auto industry, and has left all automakers scrambling for a piece of this pie.

The performances

Ford Motor Company (NYSE:F)’s solid 9% increase was driven by the 15% rise in sales of F-series pickups. These full size pick-ups have been America’s best sellers for over a quarter of a century, and are still sitting on top of the charts. It is worth noting that 2013 is the last year for the existing models, which are slated for a makeover in 2014. Ford Motor Company (NYSE:F) has done well to consistently refresh its product line and scores over General Motors Company (NYSE:GM), which has one of the most aged line-ups in the U.S. auto industry.

GM is also planning to renew 75% of its entire range within the next couple of years, but that is a story for another day. Meanwhile, Ford Motor Company (NYSE:F) has posted impressive numbers for its Explorer, Escape, and Fusion models, which were up 59%, 29%, and 28%, respectively. The company sold 195,822 vehicles in February. In the second quarter, the company is planning to increase its production by 9% in North America.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 30 percentage points in 13 months Learn how!

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!