Time to take Ford seriously

With an increasingly coveted fleet, an improving balance sheet and plenty of cash, Ford has the momentum of an oncoming F-150.

By Jim Cramer Jul 13, 2010 8:49AM

jim cramerBy Jim Cramer, TheStreet

 

What does Ford (F) have to do to get some respect around this joint?

 

Two weeks ago the company announced a $4 billion payoff of its union and preferred debt obligations. Ford didn't have to do it. It could have made the union payment with stock. It could have kept deferring the preferred payments forever.

 

But the company had so much cash and the sales are so strong, they said let's just pay 'em off. That means that when Ford reports, it is going to get some serious credit upgrades and will be able to offer the most generous financing without getting killed in the process.

 

 

This is a very special moment for Ford. The company's cars and trucks are coveted. Its rankings are way up. Its European business, which everyone was so worried about a month ago, is probably very strong, given that France and Germany are its big markets, and both are in good shape. The translation going forward won't be so bad if the euro stays where it is.

Ford's got a huge amount of momentum. It has a rapidly improving balance sheet. It will have a monster cash trove.

 

And the stock is still well off its high. More than 20% off.

 

Still time to buy.

Random musings: CSX (CSX) is speaking about numbers driven by increased volumes. Rails tend to sell off when they report, and then people think twice and buy them. This time will most likely be no different.

 

At the time of publication, Cramer had no positions in stocks mentioned.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

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