Ford Motor Company (NYSE:F) was among the stocks on Jim Cramer’s radar on Mad Money, as he advised investors to care about where a stock is going, not where it has been. Cramer highlighted the company’s new business, as he stated:
Last month, Ford Motor rolled out a new business called Ford Energy, which is their bet on battery storage… When Ford unveiled Ford Energy, they suddenly got… data center exposure, and once some analysts started pushing the story, well, the stock just roared. Now, I saw this happening, but you know what? I didn’t want to chase this one, and I’m glad I waited because this month, Ford stock has been pummeled… In time, I believe that Ford can legitimately become a real player in the battery store space. Between their manufacturing expertise and the fact that these battery storage solutions will be made in America, I bet they could be a fairly attractive supplier for customers in search of these products…
Until we see some signs that the ravenous demand for AI infrastructure is being sated, something we certainly haven’t seen so far, then I’m operating on the assumption that there will be a ton of demand for these batteries. But in the end, this is a smaller business that may pay off in the future, not something that really matters right now. Assuming Ford can hit its targets, and I don’t know if it can, the energy business won’t be reflected in their numbers until late next year, except as a cost. That said, Ford already… it trades at a very reasonable price. It trades just over eight times this year’s earnings estimates, 4.3% dividend yield, and again, that’s before doing any battery sales. However, it’s not like Ford’s benefited from having a cheap stock…
So here’s the bottom line: I love what Ford is doing with the battery business, I really do, but it’s not going to give you that much lift right now. If you’re thinking longer term, though, I mean, I’m talking about like two, three years, that’s not that long, well, it sure does make Ford a more attractive investment. I didn’t want to recommend the stock when it was screaming higher last month in response to the news, but now that it’s drifted down to $13.96, well, let’s just say it’s a different story. If you believe oil rates are coming down as I do, then you’ve got my blessing for the first time in many years to buy the stock of Ford Motor.
Image by Marcin Machalski from Pixabay
Ford Motor Company (NYSE:F) sells Ford and Lincoln vehicles, including trucks, SUVs, cars, hybrids, and EVs. The company also provides parts, digital services, and financing solutions.
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