Skip to main content

Ford is THE Automaker To Own

Ford is Positioning Itself to be THE EV Player

If you ask me, Ford Motor Company is the most undervalued company in the entire auto industry, and has been for decades. For whatever reason, it is simply a company that gets overlooked time and time again by investors. As a result, the stock has never really ever traded at the valuation it should be at.

Recently, directly following the IPO, I bought into Rivian. An EV automaker that I still think is better than Tesla, and for a variety of reasons.

I bought into Rivian, in part, because I strongly felt that it was selling a driving experience—something consumers, I think, are still interested in. Tesla has done well, but it's not selling cars. It's selling technology. Let's be real about that.

A guy interested in a muscle car like a Dodge Challenger or a Ford Mustang isn't going to be interested in a Tesla. There's no style. There's no appeal to a customer like that.

It is just a different market. And so I think that what a company like Rivian offers, unlike Tesla, is something a consumer actually wants and needs, and something more akin to the entire experience of owning and driving a car.

At the same time, when it comes to the EV market in general, I have to say that Ford really seems to be making the best inroads here. And for that reason, I like the stock even more than I did before—I have owned it for years and am a loyal Ford customer—and what's more, I really like Ford stock in the EV space.

So, it has made me change my mind a little bit about Rivian and the EV sector in general.

In other words, maybe when I went in on Rivian, I got it wrong. The money I invested in Rivian maybe should have gone into Ford instead.

The one thing about Ford that I think separates it in a major way from any major automaker is its focus. Back when we had the major auto bailouts, Ford streamlined like no other automaker did at the time. It took no government money and was the only company that really survived bankruptcy.

At least of the big three U.S. automakers.

It got rid of dead brands like Jaguar and Land Rover to hone in on its core brands, including cutting out the middle end brand Mercury, leaving it to hone in Ford and Lincoln.

And it has been a highly successful business plan.

The company has had hiccups just like any other automaker has. But it has also been able to grow their core brands like nobody's business, and that should mean something to anyone looking for a solid and strong company to invest in.

Ford has the goods.

Look, it's got the #1 selling truck in America, a position it has held for nearly four decades, and people still want the cars they sell.

At the same time I think Ford has been quieter about its entrance into the EV market, and more focused on it, and it has paid off big time. If you look at most other automakers, they have introduced products, but none of them have really taken off.

The Chevy Volt, for example, can only be chalked up as an abject failure. It caught some attention but never lived up to its promise. And General Motors seems to continue to struggle to bring forth a brand of EV that resonates with drivers.

Ford's focus has not necessarily been to be first to market, but rather to be best to market. And I think they are achieving that.

Their approach has sort of been, let's see what everyone else is doing and then let's do what their doing better. I think this quiet, behind the scenes approach, is beginning to bear fruit.

Scroll to Continue

Ford Can Corner the EV Market

Ford came out with their version of the EV Mustang, and not only is it a sleek looking vehicle, it fits the bill on so many other levels. It looks good, it wears a popular emblem and bears a popular name. It performs.

Most importantly, people want it.

I am talking, of course, about the Mach-E Mustang. It's just a great car, and even Car & Driver has given it high marks. I have to say that among all EV cars on the road, I have probably seen more Mach-E's than I have seen Tesla's. And certainly I have seen more of these than Rivian so far.

In fact, I have yet to only see Rivians on car carriers so far. I have not seen one on the road.

But there is one thing here, in the EV market, that I think is most noteworthy. It's something that I think cannot be overlooked, and that is the Ford F-150.

Again, not to beat a dead horse, but the F series truck has been the bestselling truck on the market for at least four decades. That does not appear to be changing at all.

When it comes to trucks, hands down people want to drive a Ford. It's just the reality.

The Mach-E aside, the Ford F-series truck customer is an entirely different breed of driver and customer. The Lightning is—a truck. It looks like a truck. It performs like a truck. It acts like a truck. And it is selling like gangbusters. I think what is selling now is just the tip of the iceberg.

When it comes to fleets who enjoys the most sales? Ford. More F-series trucks are in business than any other truck ever made. And the EV version of it may just be exactly what the doctor ordered.

A truck that not only performs like a truck but outperforms any other truck on the road, that is able to deliver on looks and economy for any business that needs a truck.

Ford is the Cheapest Stock in the Auto Space

I said before that I think Ford is the most undervalued of all automaker stocks, and it seems apparent.

Consider that at the current stock price of around $15 per share, with a 15 cent quarterly dividend to boot, that the company is only trading at roughly 6 times earnings.

Toyota Motor Corp, with plenty of success and plenty of cars in its own EV lineup trades at twice that. General Motors trades at 8 times earnings. Ford is just a cheap stock, even if you consider the low P/E ratio of Stellantis, who owns Chrysler.

Granted, if you compare other companies, right now almost all automakers are trading at very low future earnings ratios.

But Ford is still best poised of all of them.

Ford is THE One to Watch and THE One to Invest In

There is no doubt in my mind, that if you were to ask me today, what automaker is the company who is best positioned to make the most inroads in the entire EV market, it is Ford.

Because again, they are focused. They have brand loyalty, and they take their time bringing products to market. They spend more time on research and development than on marketing and sales. And I think this positions them better than anyone in this space.

Ford understands, fundamentally, that the key to their success is not being first. But being the best. And they are willing to take the time to make sure that whatever they put to market is the very best they can do.

They understand that what people want is to drive cars. It's all about what it looks like and how it performs. It is all about how practical it is. For personal customers and for the businesses that need utility.

And moreover, they already have the products than can deliver on both of those needs.

At the end of the day, if there is one company that has all that anyone could ever want or need, it is Ford. And I think that their stock is going to eventually reflect that.

When it comes to stocks in general, everyone is always looking for the next big thing. They are always looking for the next big name. They are looking for the next big trend or the next big product.

Ford Motor Company may actually be the biggest thing to come in a long time, having reinvented itself into a stalwart of bringing new technology and vigor to an old game.

The story of the Ford of today could become something historical in a way similar to the story of the day that Henry Ford forged the company into one of the biggest things to happen to cars since the Model T was introduced.

If there is any company in the auto market that can get it done and done like nobody's business, I think Ford will dominate the entire auto industry in the years to come, and may even become #1 in the Big Three in the U.S.

And for that reason alone, if there is any automaker to invest in, I think Ford is, hands down, the one that needs to hold a strong place in my portfolio, and yours.

Related Articles