Will Ford's winning streak continue?
Ford surprised Wall Street and Main Street in 2009 by rising out of Detroit's ashes, but can the automaker keep its momentum in 2010?
Ford Motor Co. (F) has turned over a new leaf in 2010, starting this year with a heck of a lot more promise than the last. Over the weekend, Ford nabbed the North American Car of the Year honors at the Detroit auto show for its Fusion hybrid -- and quickly followed that up with the Truck of the Year award for its European-styled Transit Connect van. All this on the heels of impressive December sales numbers about a week ago, showing Ford continues to gobble up market share from its bankrupt Detroit counterparts GM and Chrysler.
Not bad, considering at this time last year we were talking about the likelihood of bailouts and bankruptcy for the members of the Big 3. But in stark contrast to General Motors and Chrysler, Ford has risen to the occasion and emerged from the recession stronger than ever before.
The awards at the Detroit auto show -- as well as the recent resurgence of Ford sales -- are proof that the company's move towards a fuel-efficient fleet is paying off in spades. Ford has always had sleeker and smaller vehicles in its European showrooms, such as the Fiesta and a trimmer version of its Focus brand. It's just that executives were remembering the glory days of SUV and truck sales and had been convinced for years that the automaker could only make a profit selling bigger vehicles. Well, Ford CEO Alan Mulally has clearly had a change of heart over the last several months and made a genuine effort to retool the company's image as a provider of quality cars of every size.
The culmination of these efforts isn't just the recent awards in Detroit for the petite Transit Connect van or the gas-sipping Fusion Hybrid that boasts an estimated 41 mpg. Nor is it the recent sales surge as other U.S. automakers struggle, or even the fact that Ford shares have surged a staggering 700% off the March lows.
No, the real testament to the company's success is the fact that Ford finally returned to profitability in the third quarter -- topping Wall Street earnings estimates by more than 300%.
Ford gets an overall A grade in my Portfolio Grader stock-ranking tool because of this strength, including the highest marks for earnings momentum, earnings revisions and cash flow.
It's nice to see Ford winning accolades for its fleet. But all those awards and positive sentiment mean nothing if the company doesn't pull back into the black permanently, and all indications are that Ford is finally making money once more.
As first-quarter earnings creep up on us, I expect Ford to continue this trend and add to its current momentum. Don’t call it a comeback yet, but it’s reasonable to expect Ford to not just regain its own leadership position in the auto industry but perhaps even surpass its previous success in the months ahead.
(Ford and a few other auto stocks will see huge growth in 2010. Read "Gear Up for Big Profits in These Auto Stocks" for the complete list of top auto stocks to buy now.)
At the time of this writing, Louis Navellier owned shares of Ford in personal or client portfolios.
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John Stumpf acknowledges that growth has been slow, but he says he's still optimistic.
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