Ford (NYSE: F) has been an American business staple. Thanks to Henry Ford, automobiles became the standard mode of transportation for the United States and eventually the world.
And while the automaker has experienced both highs and lows during its existence, it is entering into one of its darkest hours yet. While the stock market it booming and other automakers are seeing sales increases, Ford is lost. Completely lost.
As a result, Ford stock is trading near a 52-week low. What got Ford into this predicament and what does the future hold for the company?
In this post, I will walk you through the issues at Ford and it will become clear as to why you need to avoid this stock. And if you are a current shareholder, why you need to sell Ford stock now.
The Many Issues Of Ford
In 2016, auto sales hit an all-time high. With high demand for new cars, many automakers were reaping the rewards. But not Ford. While the company was selling cars, they weren’t performing as well as other auto manufacturers.
Fast forward to today and auto sales have begun to slip. Ford recently reported earnings that missed on some marks. While revenue was up 7%, earnings per share were in line with what analysts were expecting.
The company also announced that they lowered their 2018 outlook, which if they hit their lowered estimates, places a fair market value of the stock at $11 per share.
For also talked about a restructuring plan. However they left many details out and said the details of the plan would come at a later date.
The Writing Is On The Wall
When a company comes out and says they need to complete a “major restructuring” but then adds zero details, you know things are not good. While executives have had time to start working on turning the struggling automaker around the past few years, they are only now starting to get started.
This is a perfect example of a reactive company and not a proactive one. Here, Ford knew the outlook wasn’t rosy, but they did nothing until the stock price tanked and they were forced to.