Buy 1000 Shares Of Ford (F) On 11/14/2014

Ford F-150I bought 1000 shares of Ford stock this morning at the market’s open at a price of $14.99. The stock pays a dividend of about 3.5% and has a P/E of about 9.9. Ford has had a rough 2014 and the stock has gone down from about $18 to just over $13 in the last 3 months. Now it is back up to $15 a share and I’m buying it because I think 2015 is going to be a much better year. 

3/3/2015 Update: I just bought an additional 500 shares of Ford at a price of $16.16. The stock is down today because of poor sales in February but I think that is because of the heavy snow that has blanketed the East Coast of the United States for the whole month. The good news in the report was that the new F150’s are the fastest off the lots and showed a rise of 7% over last February’s numbers. 

Ford’s F-150: The Change To Aluminum

The Ford F-150 has for years been the best selling truck in America and next month they are coming out with a brand new version that is 700 pounds lighter. It weighs less than the older models because Ford has made a substantial amount of the F-150’s body from aluminum which is lighter than steel. The new trucks will get better gas milage and better everything if you read about it at their website

To make the change to aluminum, they have had to completely revamp their production lines at considerable expense in the hopes that the new lighter model will be the truck of the future. Obviously, this new strategy comes at a tremendous up front expense and is a big gamble. But if customers like the aluminum F150 (and initial response has been great), that gamble will have been well worth it. 

Investors typically don’t like to wait for profits and thus have bid Ford stock down this year. There have been other reasons as well such as sluggish sales in Europe for much of the year. 

Reasons I Bought Ford Stock

The best time to buy a stock is when good news is on the horizon and hasn’t been fully priced into the stock. It is hard to find stocks like that but I think that is the case with Ford. Here are my reasons for buying Ford stock today:

1) The new aluminum F-150 has now started production and will ship in late December. I am hoping this truck will be a big hit in 2015.

2) On 11/12/2014, Ford announced that it had its fifth straight monthly gain in sales in Europe. Sales were up about 8% with Italy and the UK being the two standouts.

3) A nice 3.5% dividend

4) The sell off in September and October made this stock cheap and while it has risen to $15 now, I feel there is further upside as the new F-150 hits the showrooms in 2015 and I believe the stock will go up to the $18 to $20 range next year. 

10 Responses to “Buy 1000 Shares Of Ford (F) On 11/14/2014”

  1. Brian says:

    Bruce

    Thank you for making this website it’s very helpful. I have a few questions. How do you feel about the Ford stock? I’ve been doing my home work on ford 2018 looks like a very good year for the company.

    Also could you shed a little more light on how taxes work on stocks. Thanks

    • Bruce Alan says:

      Well, I don’t plan on selling my Ford shares anytime soon. I’ve been disappointed in the performance of the stock since I bought it (obviously), but the big dividend makes up for some of those losses. It seems one of the reasons some of the car manufacturer’s stocks haven’t done so well in the last couple years is because there is so much talk of self driving cars and the prediction that fewer cars will be bought when that happens. Thats a head scratcher for me and I have no idea if that will ever come true.

      When you sell a stock with a gain you have to pay taxes on the gain (tax rate is smaller if you hold longer than a year). When you sell a stock for a loss you can deduct up to $3000 of that loss but no more from your income. If you have more than a $3,000 total in the stocks you sell during a year you can carry over the loss till the next year. Its too complicated to explain here but that is most of it.

  2. Terry says:

    Bruce, this stock is falling quite hard today, what’s your opinion on its future trend now its analyst rating had fell to “Neutral” from “Buy”?

    Is it time to sell?

    • Bruce Alan says:

      Terry,
      I am not selling but I cannot advise you what to do. Why would I sell when the whole reason I bought the stock hasn’t even begun to play out? BTW, if I sold a stock every time an analyst did a downgrade, I doubt there would be any stocks left to buy!

  3. EarthCrisis says:

    Good decision. I think too it’s going to be a much better year. Unfortunately a bit late into this (as usual…) – 400 at 15.99. Wish at least I had a 1000…

  4. Confidence says:

    What is your take on Energy Stocks? Given that oil price is falling, these Energy Stocks appear really cheap. Are you staying away or do you see a rebound in the near future?
    I am looking at Cenovus, Husky, Suncor and Seadrill.

    I will appreciate your opinion.

  5. Mo says:

    Thanks for the heads up. I just got 35 shares, not much I know but its a start.

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