Ford: A Fallen Angel

11/23/2020 5:00 am EST

Focus: TRANSPORTATION

Jim Powell

Principal Analyst, Global Changes & Opportunities Report

Ford Motor Company (F) is a fallen angel that is continuing to make tough decisions to regain its former success in the marketplace — and on Wall Street, suggests Jim Powell, editor of Global Changes & Opportunities Report.

All of Ford’s passenger cars except the Mustang and the Bronco are on the way out. The company’s resources are being redirected towards its very profitable light trucks — and its coming line of electric vehicles.

The biggest news about Ford lately isn’t coming from the factory floor, or the account’s office. Instead, company insiders have been quietly buying Ford stock.

Although that’s not a foolproof indicator that prices will increase, insider buying has a good track record for revealing a company’s outlook.

Just as important as insider buying is insider selling. Most companies normally have a lot of insider selling throughout the year for the same reasons that the rest of us sell stocks.

In addition to worrying about price declines, college tuition bills come due, people decide to retire, and so on. However, for the past several months, most Ford insiders have been hanging onto their shares with both hands.

Ford

Not surprisingly, Ford’s stock price made a nice gain through October on no particular news (see the chart above). Overall, Ford is recovering faster than expected. If you want to ride along, you should probably get on board soon.

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