Is Ford Worth a Look?

You may remember the old acronyms for Ford: “Found On Road Dead” and “Fix Or Repair Daily.” People used them to make fun of the reliability problems Ford had in the past. But they could also apply to Ford’s stock in recent years.

Since 1998, Ford has dropped from a high of $38.63 and is now trading under $5 per share. The last time Ford was this low, in 1991, some of my colleagues weren’t even old enough to drive.

At this point, the market cap for Ford is a paltry $10.13 billion. However, the company has over $25 billion in cash on the balance sheet. Granted, they have tremendous debt on the balance sheet as well, but they have more than $11 in cash per share.

I am not saying you should rush out and put all your available funds into Ford stock. But for a long-term investment (5-10 years), Ford looks like a bargain at this point.

There will be more bumps in the road, but I can’t see the government allowing Ford or General Motors to go under. These are the last two publicly held U.S. automakers, and politicos don’t want to see either of them fail.

There is one more acronym for Ford that I didn’t mention: First On Race Day. The race could be a long one, but in the end it could pay off for patient investors.

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