Ford's F-150 Is a Hit: So Why Is Ford Stock so Low? - Investorplace.com
Ford Motor ( F ) has a huge hit in the new aluminum-bodied F-150 pickup, some healthy margins and record quarterly profit in The States, so what gives with Ford stock. Ford got a nice boost on the second-quarter earnings news, but the stock is still negative for the year-to-date. And Ford’s forward price to earnings multiple of less than 8 is ominously low. That ultra-low P/E is the Street’s way of saying that it has a pessimistic view of the risk-reward potential of Ford stock. Although this isn’t particular to just Ford, as General Motors ( GM ) also changes hands at about 8 times forward earnings. While sure it’s true that stocks become cheap because of an underlying business issue, but the Ford earnings report on Tuesday was good enough to show that Ford stock is indeed a bargain, not a value trap. After all, the consensus is that Ford stock is a second-half story. Good news for Ford: gas is cheap. Yet in spite of all this, Ford stock is still languishing. Ford Stock Deserves a Higher Multiple Ford stock faces a number of headwinds, and Ford earnings reflect that. Source: investorplace.com
