Ford Motor Company (NYSE:F) survival and long-term prospects are no longer in doubt after a stellar fourth-quarter that has seen it mark a remarkable renaissance in the auto industry. The auto giant is already attracting interest from CNBC’s, Dan Nathan, who encouraged by impressive January sales believes the stock could close in on the $18 a share mark, very soon . The analyst ranks the stock highly compared to General Motors Company (NYSE:GM) in the auto industry especially if it is to clock its two hundred day moving average pf $16 a share.
The analyst is shunning General Motors Company (NYSE:GM) having not had the best of runs in 2014 at the back of the ongoing vehicle recall menace. Ford Motor Company (NYSE:F) has already posted record sales for January that saw an increase of 19% driven by strong demand in China as General Motors experienced a slowdown in sales.
“[..] What really caught my eyes this week it started out with those blowout January numbers, I think Ford Motor Company (NYSE:F) posted the biggest January since 2004. […] when I saw the break out in names like AutoNation, Inc. (NYSE:AN), O’Reilly Automotive Inc. (NASDAQ:ORLY) and Delphi Automotive PLC (NYSE:DLPH). These things broke out on massive volume to all-time highs. I took a look at Ford; Ford for two years has basically been trading between $13 and $18. Today it is right about at the mid-point it had a big rally over the last week over 11%,” said Mr. Nathan.
According Nathan, Ford has been trading at between the $13 and $18 a share level with the $16 mark expected to be a breakout level, which should signal an upward rally. The company is expected to post more sales report in May as well as Q1 earnings report. Presenting a perfect opportunity according to the analyst for the purchase of May 16 call option that may go on sale for $0.70 a head of the stock closing in on the $18 a share mark.
Ford Motor Company (NYSE:F) has continued to benefit a great deal from more people buying its big SUV’s truck at ongoing low oil prices around the globe according to Michael Khouw. The fact that auto companies led by Ford and General Motors Company (NYSE:GM) carry a lot of debt in their books means the stocks are highly leveraged favoring the making of bets in the Option call markets, according to Khouw.
“The largest selling vehicle in the United States is the Ford F150, sales about a million units that’s also a very high-profit margin vehicle; it is also a newly released vehicle. The F150 is a completely new design; this is really one of the things that could propel this, and this thing is trading at less than 10X extra month earnings,” said Mr. Khouw
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