The Real Story: Taking a Test Drive at Ford

In order to be a good contrarian, you have to revel at others' surprised reaction to your against-the-grain picks. Take, for example, Jeffrey Spotts, portfolio manager for Prophecy Asset Management, who laughed heartily when I told him I couldn't find any fundamental reason to like his idea of buying shares of Ford Motor (F Quote).

Being a technical analyst, Spotts is not especially interested in how many Ford Explorers are sold or if legacy health care costs are rising. What's important to him is how the stock trades -- and trade it has.

In the past two weeks, shares of Ford have traded higher on very heavy volume. "When I see big volume come in at low prices, I have to notice," he said. (The stock did fall 4% Thursday on 30.7 million shares vs. its three-month daily average of 19.7 million.)

Spotts, who recently bought the stock personally as well as for clients, points to the extreme negative sentiment on the shares. December's short interest of 96.9 million shares is up 53% vs. July and 22% vs. November. He also likes the fact that the recent shorts are underwater, something that could lead to a squeeze.

On the fundamental side, it's hard to drum up some enthusiasm. While most agree that Ford is in better shape than rival General Motors (GM Quote), keeping up with GM's recently announced price cuts won't help. The big problem is that Ford isn't exactly wowing customers.

George Magliano, director of automotive industry research for the Americas, at economic forecasting firm Global Insight, carped: "There's nothing exciting about Ford."

Ford lacks a "gotta have" product, according to Michael Robinet, vice president of global vehicle forecasts for automobile research firm CSM Worldwide. The Ford Edge "gets them part of the way there," he says. "But the Japanese have been selling these kinds of cars for five or six years." The Edge is a crossover vehicle, which is like an SUV but built on a car's platform, so it burns less gas and handles more like a smaller vehicle. Crossovers were all the rage at the North American International Auto Show in Detroit this week, and the buzz was about how they're expected to outsell SUVs this year for the first time.