I’m glad that I do my own investments and trades, because if a broker saw the percentage of my portfolio that belongs to Ford Motor Company (NYSE:F) and Core Laboratories N.V. (NYSE:CLB), it’d probably give them a heart attack. That’s how confident I was in these two stocks, and it’s been a nice ride for me thus far! Even after both have seen favorable run-ups over the last few months, I still believe they both are great buys today. Let’s take a look at a few factors I believe can bode well for these investments and could boost the stock prices even higher.
First up: Ford
I unfortunately don’t have enough space in this article to cover all the things I love about Ford Motor Company (NYSE:F). I’ll limit it to two specific factors – management and products – that show the strength of this company and why I believe it’s undervalued.
In a not so distant past, Ford had to dish out massive cash incentives to move vehicles off the lot. That was because the vehicles weren’t up to par, and the resale value plummeted as no one wanted to buy the vehicles without those incentives. That’s not the case today, and consumers are attracted to the newer vehicles more than ever. The Fusion, Focus, and Escape are all recently refreshed and are selling extremely well. Those three will help Ford boost its market share over the next few years. It wasn’t long ago that the only quality vehicle Ford Motor Company (NYSE:F) produced was its F-Series truck. That, again, is not the case anymore. Consider this: Last year, Toyota Motor Corporation (ADR) (NYSE:TM) recalled more vehicles than any automaker in the U.S. Second place went to Honda Motor Co Ltd (ADR) (NYSE:HMC), at 3.3 million. Ford came in fourth, with a low 1.3 million vehicles recalled. Make no mistake, Ford’s quality is gaining ground, and quickly.
Let’s take a look at Ford Motor Company (NYSE:F)’s management, which I consider to be one of the most important factors when choosing investments. I recently wrote why I believe Alan Mulally is worth every penny of his salary and bonuses and am glad to have him at the helm through 2014. Management has consistently made the right decisions since Mulally took the reins. With those decisions, it was able to avoid bankruptcy in 2006, return to profitability two years ahead of predictions and earn record profits. Management has put in great incentive programs to create a leaner operation. One thing holding Ford’s stock back from soaring is the dim guidance for Europe. That’s why I’m buying now; Ford has been through this dance before, a la the U.S. market in 2008. Management knows what works, what doesn’t, and will apply that formula again in Europe. When the results comes to fruition, expect Fords stock to rise rapidly.