Ford (F): Its All About 2015

F-150Ford stock is down today like it has been everyday for almost 2 months. Today though, it is in reaction to the just released earnings report that actually had a lot in it that was expected. It seems investors, in their constant desire for profits now, are unwilling to give Ford any leeway in its ramp up to what should be a big year for them in 2015.

With Ford you should know that it all hinges on 2015 because of the new aluminum F-150 truck that will go on sale in December. Switching much of the body from steel to aluminum will allow the new trucks to become more fuel efficient with their 700 pound (or so) lighter weight. Retooling the manufacturing process for something as big as this is no small feat and clearly dictated that costs would be up and sales of existing trucks would be down this year.

The publicity around the new truck has been heavy and if you are in the market to buy a truck, chances are you have heard about the new aluminum body F-150. That is why many prospective new truck owners have been waiting for the F-150 and holding off buying this year’s model. Common sense if you think about it. But stock investors are a fickle bunch that often don’t like to wait and that has been much of the reason for the sell off in Ford stock this year.

With a P/E of just over 8 and a dividend of about 3.5%, investors buying the stock today are getting a nice return to wait for what could be a big year in 2015. The stock is cheap by just about any metric you choose but it probably won’t shoot up for awhile (if ever). Nevertheless, today’s pullback of over 4% after decent earnings seems like it might be a good entry point for anyone valuing a decent dividend on a stock that has good potential going forward.