Catch a Lightning-in-a-Bottle Opportunity with Ford
Remember the days when Ford (NYSE:F) was the poster child of relatively safe, but ultra-slow investments? Those days are long gone, as F stock has provided jaw-dropping returns over the past year and a half.
However, it’s required a great deal of patience to buy and hold those shares — and an understanding of the principle, “The trend is your friend.” When an investment is moving quickly in the right direction, sometimes it’s best just to sit tight and let it happen.
Even after its astounding gains, investors can still adopt a “be right and sit tight” buy-and-hold strategy with F stock. Otherwise, they might miss out on the best part of the move — like when the Ford share price rallied nearly 15% between Jan. 3 and Jan. 4.
Just a few years ago, a price move of that magnitude may have been unthinkable in F stock. However, that was then and this is now — and Ford just reminded us all why it’s still a true American icon among automakers.
F Stock at a Glance
If you had the foresight to pick up F stock at $4 in March of 2020, go ahead and pat yourself on the back. You deserve the 500% returns you’ve made on that investment.
Don’t get the wrong idea — it wasn’t just a straight line from $4 to $24. Along the way, the market shook out the weak hands, like it always does.
The summer of 2021 was particularly challenging, as F stock shed 18% of its value in a matter of weeks. But then, we’re talking about a rock-solid company here and when the going gets tough, the stakeholders can count on Ford to deliver.
Even beyond the share-price appreciation, Ford’s loyal investors should stand in good stead. That’s because the company currently pays a forward annual dividend yield of nearly 2%.
Plus, Ford’s trailing 12-month price-to-earnings (P/E) ratio is 30.6, which isn’t too extreme. Thus, value-focused investors need not worry about the shares being too pricy.
Moving at Lightning Speed
You might be wondering: what could possibly have caused F stock to gain nearly 15% on Jan. 4? Without a doubt, it was a press release from Ford. This announcement is proof positive that Ford will remain a major competitor in the electric vehicle (EV) space.
Specifically, Ford has observed “soaring customer demand” for its all-electric F-150 Lightning pickup truck. Yet, that’s not even the best part of the announcement.
Reportedly, Ford plans to nearly double the production capacity of this EV to 150,000 vehicles per year. This will take place at the Dearborn, Michigan-based Rouge Electric Vehicle Center.
Of course, this isn’t Ford’s only venture into the EV space. Ford’s all-electric van called the E-Transit will be available for purchase early this year.
Stepping On the Accelerator
Along with ramping up its production schedule for the Lightning pickup truck, Ford also recently revealed it is tripling production of its Mustang Mach-E. The company is aiming to reach 200,000-plus units per year by 2023.
This doesn’t change the fact that there’s a shortage of required supplies and workers in America. That’s a factor which will inhibit the growth of a broad variety of U.S. businesses.
Nevertheless, Kumar Galhotra, president of The Americas & International Markets Group, Ford Motor Company, remains optimistic.
“With nearly 200,000 reservations, our teams are working hard and creatively to break production constraints to get more F-150 Lightning trucks into the hands of our customers,” Galhotra reassured.
Despite any obstacles, it’s full speed ahead for Ford as far as Galhotra is concerned. Since the demand is there, Ford will find ways to meet it.
“The reality is clear: People are ready for an all-electric F-150 and Ford is pulling out all the stops to scale our operations and increase production capacity,” Galhotra asserted.
The Takeaway on F Stock
It’s no exaggeration to say that Ford’s recently-issued press release is an industry changer. With its production scale-up, Ford will threaten its peers for years in the vehicle electrification market. After all, it’s not every day that demand is so great, an automaker feels the need to double its production capacity.
Consequently, F stock is still worth owning even after a year and a half of share-price appreciation. There’s still plenty of value here, so don’t hesitate to stay in the fast lane with Ford.
On the date of publication, Louis Navellier had a long position in F. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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