Three months ago, Ford announced first quarter earning in which net income declined, to $1.1 billion from $1.7 billion. Earnings per share were $0.29 cents per share, down from $0.44, but better than expected. Also, revenue fell to $40.3 billion from $41.9 billion a year earlier, but higher than expected. Beating the expectations were enough to send the stock 10% higher on Friday, it’s best one day performance since 2009.
Last year global car sales declined for the first time since 2009. Based on first half U.S auto sales, the U.S. auto sales are on pace to drop for a second year in a row.
Automakers are facing headwinds related to a trade war with China and threats of further tariffs up to 25% that could be implemented in November. The Chinese market also is facing oversaturation with predictions of a 7.5% decrease in sales this year after it began to shrink at the end of 2018.
The U.S. auto industry is heading toward a nearly 30% decrease in sales by 2022, a Bank of America Merrill Lynch analyst predicts.
Yet this article I read on Yahoo Finance stated the 3 reasons to buy Ford under $10 were the following: Ford’s Volume and Market Share Trends Are Improving, Depressed Domestic Revenue Trends Will Turn Around, Profit Trends Are Moving in the Right Direction.
I won’t get into the details of the article because the case to buy Ford in my opinion is weak. All one has to do is look at the chart. The fact that price couldn’t even make it to the first weekly supply at $11.25, but stalled and fell at $10.50 tells you the #1 reason not to buy Ford under $10. The chart suggests price is going to fall to the monthly demand at $5.25.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.