Ford Motor Company (F) is Steering Ahead

GM has also posted robust growth, clocking 7% sales growth over last year and selling 224,314 vehicles. The company said this has been its best February since 2008. The key performer was the Chevrolet Silverado pickup, which saw a 29% increase. In order to maximize gains from the strong demand for trucks, GM is offering free scheduled maintenance for two years or 24,000 miles on its full-size Chevrolet and GMC trucks.

The offer is valid till April. GM’s Cadillac and Buick also recorded impressive increases. Chrysler’s results were less exciting, with the company posting 4% sales growth and sold 139,014 vehicles. Given that last year the company had fuelled enthusiasm with its 21% sales growth, the results this February were quite a dampener. The discontinuing of the Jeep Liberty midsize SUV was cited as the key reason.

All three big Japanese automakers – Toyota Motor Corporation (ADR) (NYSE:TM), Honda, and Nissan posted relatively weaker results. Toyota was up 4.3% with 166,377 vehicles sold, while Honda was down 2% with 107,987, and Nissan down 6.6% with 99,636.

Reversing its usual pattern where truck sales trail car sales, Toyota gained from the strong truck market posting 16% rise in SUVs and trucks, while losing out on its cars which were down 3%. Toyota has a 6.3% share in the U.S. truck market, dominated by Ford with 39.9%, GM with 35.6%, and Chrysler with 18.2%. The company recently unveiled its 2014 Tundra full-size pickup truck.

Ford’s valuation is the key

While Ford Motor Company (NYSE:F) outpaced the industry in February sales, its valuation has remained relatively inexpensive compared to the industry, thus increasing its appeal as a value proposition. At the current stock price of around $13 per share, Ford has a PEG ratio (5 yr expected) of 0.86 compared to industry average of around 1.3, and forward P/E ratio of 7.59 as against the industry average of 11.6.

This implies that Ford Motor Company (NYSE:F)’s current valuation does not factor in the upside that the stock has to offer. With an attractive line-up, the company is solidly positioned to gain from recovering U.S. economy in the long-term and the strong demand for trucks in the near to medium term. The February numbers provide ample evidence regarding that.

The article Ford is Steering Ahead originally appeared on Fool.com and is written by Eshna De.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.