Ford

Trade Ford Stock

The Ford Motor Company (NYSE: F), which is more commonly referred to as Ford, is a multinational auto manufacturer with its headquarters in Dearborn, MI, USA. The company was founded by Henry Ford in June 1903 and is involved in the marketing and sales of automobiles under the Ford brand, as well as luxury vehicles under the Lincoln brand. It also has stakes and alliances with several global auto brands from Brazil to China. The company is unique in that it has been controlled by the Ford family for most of its history, and even though they have minority ownership in the stock, they maintain 40% of the voting power.

Ford has been instrumental to automaking, and to industrialisation, having introduced the assembly line method of manufacturing in the early 20th century. When first introduced, these methods were known as Fordism. Ford has previously owned the Jaguar and Land Rover brands, but sold them to India’s Tata Motors in March 2008. Ford also owned Swedish automaker Volvo from 1999 to 2010.

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Ford Motors Global Positioning

Ford is the second largest U.S. automaker, behind General Motors. It is also the fifth largest global automaker behind Toyota (Japan), Volkswagen (Germany), Hyundai-Kia (South Korea), and General Motors (U.S.) based on 2015 production numbers. Ford has been a publicly traded company since 1956, but the Ford family has maintained control over the company through their 40% voting rights conveyed by the special class B shares they own.

Ford skirted close to bankruptcy during the global financial crisis but has since been able to return to profitability. In 2019 Ford was ranked 12th on the Fortune 500 listing based on its global revenues of $160.338 billion. Ford saw its production and market share diminish significantly from 1998 through 2008. Since then global sales have increased, and while market share was at 16.10% in 2011, it has since dropped to 13.74% as of 2018. Ford has plants and facilities in roughly 90 countries around the world and employs 199,000 employees.

Ford Motor Company History

Prior to starting Ford Motor Co. in June 1903 Henry Ford began the Henry Ford Company in November 1901. The company became the Cadillac Motor Company in August 1902, and Ford left the company with all the rights to his name. Ford was then able to launch Ford Motor Co. in 1903 with $28,000 (roughly $800,000 in 2019) raised from 12 investors, the most notable of which were John and Horace Dodge, who later went on to start their own auto manufacturing company. Rather than Ford becoming President of the new company, local banker John Gray took the position, in an effort to calm investors who worried Ford would soon leave the new company as he’d done at the earlier company.

In the early year of the company, it produced just several cars a day in its factory in Detroit, MI. The cars were each made by groups of two or three men, with the parts coming from suppliers that were contracted by Ford. It took just a decade for Ford to refine and expand his assembly line concept to become the world leader in manufacturing efficiency. Ford even brought much of the parts production in-house in a vertical integration that benefitted Ford Motors.

A Declining Legacy

Over the decades Ford had many firsts and many contributions to both the auto industry and to manufacturing processes in general. Ford introduced both rear seatbelts and child-proof locks in the 1950s, and the seatbelt reminder light in 1965. In 2000, as a new century and millennia was beginning, Ford has U.S. sales of 4,202,820 and a market share of 23.61%. That was the high point for the company.

As the new century dawned, Ford began to fall into the shadows. A combination of a faltering U.S. economy, higher fuel prices, and legacy health costs led to falling profit margins, declining sales, and a drop in market share. In the early 21st century most profits for Ford came from financing consumer auto loans through the Ford Motor Credit Company.

By 2017 Ford was desperate to improve profits and halt the slide in the Ford stocks price. The company announced a $3 billion cost-reduction effort and a 10% cut in its salaried workforce in North America and Asia. These cuts were on top of plant closures from earlier in the decade. Finally, in April 2018 Ford announced it was discontinuing passenger cars in the U.S., aside from the Mustang, due to the declining popularity and demand for this type of auto. By focusing on SUVs and trucks, Ford hopes to reap cost savings of $25 billion and unlock value from the company.

Ford Stocks Price History

Ford stocks (NYSE: F) have been trading for an extremely long time, so we want to focus on the nearer action of the stock. There was a first rally in the 1980s that took the stock from $1 in 192 to $15 in 1987, which was an amazing run. After remaining flat over the next several years, the stock dipped to $6.61 a share in November 1991.

Ford Stocks in the 1990s

Based on the performance of the stock during the 1990s, you would never know about the coming pain of the 21st century. Not only did Ford’s sales, profits and market share explode, it’s stock also exploded higher. From the low of $6.61 a share in 1991, Ford stocks reached a high of $37.15 in March 1998. Shares dropped and quickly rebounded, hitting $38.40 in April 1999 and printing a double-top. That was the all-time high for Ford stocks.

Ford Stocks in the 21^st Century

Shares came off the highs in a choppy downtrend that picked up momentum from the second half of 2001 as sales of Ford cars and trucks plunged. It first hit $6.50 a share in March 2003, bounced to more than double its price in the following year, and then fell to as low as $1.48 a share in February 2009 as the financial crisis pummelled the stock. The next two years would be the best for Ford stocks since the rally of the 1980s. Shares rose to $18.75 by January 2011 as the U.S. economy recovered from the global financial crisis. And sales of Ford’s products began to improve as well. After a dip Ford stocks reached a similar level in 2014, printing a double top which would presage the downtrend in the stock that’s gone from September 2014 to January 2020.

Ford Stocks Trading Ideas

With Ford stocks trending lower since 2014, it would seem a short sale would be the best opportunity for traders. However, a closer look at the daily chart indicates the stock has actually turned sideways since reaching a bottom in December 2018. Since that time, Ford stocks have held to a range of $8.75 to $10.50 a share, which gives traders the chance to trade the range, buying at the low and selling at the high. Buying at the low would also allow traders to capitalize on the 6.5% dividend yield of the stock.

Another possibility would be to set an alert for a break of the high and low levels in the current trading range. Such a break would indicate either the continuation of the downtrend or a reversal of the trend that could see significant gains for Ford stocks, considering they’ve been depressed for so long.

Disclaimer: This is a general analysis and not to be viewed or construed as actual trading advice or a recommendation of any kind and just an example of how a particular instrument could, potentially, be traded.

In Conclusion

Ford stocks have been under pressure for half a decade, even as the broader stock market has rallied consistently to new record highs. That doesn’t mean we can’t make a profit trading stock like Ford. When you open an account at Friedberg Direct, you can easily short a stock like Ford with no restrictions. And you can download the MetaTrader 5 platform and use it to analyse the technical behaviour of Ford stocks price.

With 38 built-in technical indicators in the new MetaTrader 5 platform, it should be easier to identify potentially profitable entries and exits. Not only for Ford stocks, but also for the hundreds of other stocks, commodities, and indices which can be traded at Friedberg Direct on the MetaTrader 5 platform.

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