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Discussion Starter #1
Yikes, yesterday Ford stocks dropped 7% yesterday because of Coronavirus and dropping oil prices.

If anyone has Ford in their portfolios I hope for your sake they bounce back in a big way!

Shares of Ford Motor Company (NYSE: F) were down sharply on Monday, as a collapse in oil prices and growing concerns about the novel coronavirus, COVID-19, sparked a broad-based market sell-off.

As of 10 a.m. EDT, Ford's shares were down about 7% from Friday's closing price.

So what
At first glance, a big drop in oil prices might seem bullish for Ford, given that it generates the majority of its profits from the sale of trucks, SUVs, and commercial vehicles. But there's a larger concern at play here: The coronavirus epidemic and the drop in oil prices have many traders worried about a recession, and recessions are bad news for automakers.

Falling oil prices won't hurt Ford's truck sales, but a recession would. Image source: Ford Motor Company

Automakers like Ford are cyclical businesses, meaning their sales and profits rise and fall with consumer confidence. Because automakers have such huge fixed costs (plants, equipment, labor contracts), they need a high level of sales just to break even -- but sales tend to fall sharply during recessions, and automakers' profits tend to fall even more.

Put another way, a 20% decline in sales would cost Ford (and its rivals) much more than 20% of its operating profits.

Now what
In China, where government authorities have mounted an aggressive response to the epidemic, auto sales fell 80% in February. A similar situation in the United States would hit Ford very hard.

It's still too early to tell how the coronavirus will play out in the United States and much of Europe. But given China's example, it's reasonable for Ford investors to worry about what might lie ahead, even if gas prices are headed downward.
 

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Yep, when Ford got driven down to the $5.50 range, I had to jump in and grab 2,000 shares.

Ford at that price pays well over a 10% div yield, so does well even if the stock price doesn’t recover a lot. Of course at that price Ford will eventually have to reduce the dividend.

Amazing, that a determined Media can still drive mass hysteria over 68 corona virus deaths (almost ½ at one Senior Center In Kirkland,WA) and totally ignore the 22,000 deaths already this flu season from the “Normal Flu”. More than a little TDS (Trump Derangement Syndrome) is involved here also.
 

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Discussion Starter #3
Yep, when Ford got driven down to the $5.50 range, I had to jump in and grab 2,000 shares.

Ford at that price pays well over a 10% div yield, so does well even if the stock price doesn’t recover a lot. Of course at that price Ford will eventually have to reduce the dividend.

Amazing, that a determined Media can still drive mass hysteria over 68 corona virus deaths (almost ½ at one Senior Center In Kirkland,WA) and totally ignore the 22,000 deaths already this flu season from the “Normal Flu”. More than a little TDS (Trump Derangement Syndrome) is involved here also.
I think you'll get more than the 10% div yield on those shares. Very savvy move.
 

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Discussion Starter #7

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As someone posted on another thread, there's a bigger reason it dropped this morning:

It's back up to $4.40 and still a good deal.
 

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Hallelujah! Maybe some cooler heads prevailing or maybe somebody sees that businesses could die after an extended shutdown if the economy slides.
Sorry, you're behind on the posts. I'll recap:
Tuesday UAW called for shut down.
Wednesday morning UAW and automakers agreed to clean, not shut down.
Late Wednesday morning two facilities shut down by active covid-19 cases.
Wednesday afternoon Big-3 agreed to all shut down. Ford includes all of Ford North America.
Thursday morning Ford suspends dividend.
I think that's all.
 

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Sorry, you're behind on the posts. I'll recap:
Tuesday UAW called for shut down.
Wednesday morning UAW and automakers agreed to clean, not shut down.
Late Wednesday morning two facilities shut down by active covid-19 cases.
Wednesday afternoon Big-3 agreed to all shut down. Ford includes all of Ford North America.
Thursday morning Ford suspends dividend.
I think that's all.
Well damn, that's disappointing.....no cool heads.
 

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I think there were cool heads. It was fine until they looked at the facilities they were already going to shut down and realized they should close them all.
 

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I think there were cool heads. It was fine until they looked at the facilities they were already going to shut down and realized they should close them all.
But what was the reason for the shutdown? If it is strictly for the virus, I think it was an overreaction. There should be obvious ways to mitigate potential transfer of the virus on the work site. If it was due to declining sales or a forecast of declining sales, then that is another story entirely.
 

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Just think about how contact tracing is carried out. When a facility is shut because of an infected worker, everyone who came in contact with him at work goes into self-quarantine and you part to fully clean and disinfect any part of the facility they might have touched or breathed on. Then you reopen with part of your trained workforce unavailable. High cost, loss of workforce and added health care costs. What happens when the next person tests positive?

Closures of all non-essential businesses like the one just announced in Pennsylvania are only a matter of time: (Gov. Tom Wolf orders all Pennsylvania businesses that aren’t ‘life-sustaining’ to close, will enforce order)
 

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Just think about how contact tracing is carried out. When a facility is shut because of an infected worker, everyone who came in contact with him at work goes into self-quarantine and you part to fully clean and disinfect any part of the facility they might have touched or breathed on. Then you reopen with part of your trained workforce unavailable. High cost, loss of workforce and added health care costs. What happens when the next person tests positive?

Closures of all non-essential businesses like the one just announced in Pennsylvania are only a matter of time: (Gov. Tom Wolf orders all Pennsylvania businesses that aren’t ‘life-sustaining’ to close, will enforce order)
All of this is an overreaction, IMO. Testing of workers is what is required. Prudent distancing and disinfecting is required. Protecting vulnerable groups is what is required. Shutting down is not required, at least not for any extended length of time. I think the effect on the economy is being completely discounted since everyone is being scared to death about getting sick. I again say to look at South Korea, they aren't shutting down their economy, but are having some success in reducing the virus's impact.
 

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I'm tempted to buy shares now but I'm waiting. I'm concerned that mass layoffs in industries connected to consumer spending will drag the economy further, encouraging more panic selling in the capital markets that withdraws money from the markets and brings stocks down further. Even if we don't see panic selling, more people may have to liquidate their investments to cover their monthly expenses if they don't have a job.

Even if I buy late at $6, I'd still own Ford shares at a price that offers plenty of upside.

Once we get through this, I think people will see how well the Mach-E, Bronco, Bronco Sport (the new smaller Baby Bronco), new F-150, and new Transit EV will be received and Ford is going to shine as the economy rebuilds. That's going to drive shares higher.

Any other equities people have an eye on? Sounds like we have a group of traders here!
 

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My $4.00 buy order hit today just before this announcement sent prices back up:
Trump Allows Ford, General Motors, Tesla to Make Ventilators
 
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