Quick: if you had to pick one automotive business to invest in for a lifetime, what would it be? Ford Motor (NYSE:F) is as valid a response as any. For many generations, F stock has provided reliable returns.
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Don’t get me wrong — there have been rough patches along the way. The obstacle that’s top-of-mind for many of today’s investors is the microchip shortage.
That issue weighed on F stock for several recent months. However, it appears the stock is making a nice comeback and breaking above a crucial resistance level.
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At the same time, Ford is working through the chip shortage and posting delivery numbers that might surprise the skeptics. Moreover, the company’s best stats aren’t necessarily sourced from Ford’s home country.
F Stock at a Glance
So, let’s talk about that resistance level I alluded to earlier. F stock approached $17 in 2010, 2013 and 2014, but the buyers were rejected on all three of those occasions.
Now, they’ve been given another chance to clear that level. Granted, the semiconductor shortage may have contributed to a stock-price pullback in September.
As of Oct. 29, however, F stock has surged to a few cents above $17 on heavy trading volume.
Some detractors might claim Ford shares have gone up too much since January. Admittedly, ascending from $8 to $17 represents a powerful share-price move.
On the other hand, just because a stock has gone up, that doesn’t always mean it’s overvalued. Consider that Ford’s trailing 12-month price-to-earnings (P/E) ratio is just 19.15x. That’s not something you’d see with an overpriced stock.
Don’t worry about the doubters and just keep your eyes on the prize. As F stock clears $17 and stays there for the long term, the naysayers will wish they’d been in the trade.
Ford Is Laying the Foundation for Success
Ford is considered an emblem of American ingenuity. However, the company is scaling up its operations globally. Even during the chip shortage, Ford managed to demonstrate its ability to compete in multiple world regions.
For example, in China, Ford recently posted year-to-date (YTD) sales of around 457,000 units, up 11% year-over-year (YOY). When you think of automobiles in China, do you imagine a Lincoln going down the roadways? Well, maybe you ought to.
During the first three quarters of 2021, sales of Ford’s Lincoln models exceeded 66,000 units. That’s an improvement of 68.7% YOY.
Not only that, but Lincoln achieved its best-ever monthly sales of more than 8,600 units in September.
Ford China President and CEO Anning Chen noted the company’s progress, saying, “Ford continues to lay the foundation for success in China by building on our strengths in Ford [Plus] growth segments.”
A Road Map to the European Market
Meanwhile, over in the European Union, Ford is posting solid numbers in terms of commercial and passenger vehicle sales.
Impressively, the Ford Ranger truck was the best-selling commercial vehicle brand in Europe during 2021’s third quarter. It was also the number-one commercial vehicle brand in seven European markets, including the U.K.
Then there’s the Transit Custom, which was the best-selling Ford vehicle in Europe YTD as well as the best-selling vehicle in the U.K. this year.
Moving on to passenger vehicles, during the third quarter of 2021, Ford sold 10,200 of its sporty Mustang Mach-E units. Furthermore, the Puma was the best-selling Ford passenger vehicle across Europe.
Additionally, the Kuga plug-in hybrid vehicle (PHEV) was the best-selling PHEV across the industry in the third quarter, with more than 60% of Kuga sales being PHEVs.
The Takeaway on F Stock
I can’t stop anybody from abandoning F stock if they’re fearful of microchip shortages. But the data clearly indicates Ford is delivering its vehicles in large numbers, even during these challenging times.
Plus, the company is making its mark on an international scale. All in all, Ford continues to offer excellent shareholder value and is still a sensible investment for the long term.