This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Ford: The Last Brutal Quarter

This post appeared yesterday on RealMoney. Click here for a free trial, and enjoy incisive commentary all day, every day.

Shares of Ford Motor (F) have started to gain a lot of Street cred. After bottoming at $1.70 on March 6, the stock went on to rise in 10 of the next 11 sessions, hitting $2.90 on March 23. After moving sideways into early April, the stock again rose in seven out of eight sessions, and recently traded hands at $4.30. Ford still has its detractors: A Credit Suisse analysis suggests the stock is worth no more than $3.



(Goldman Sachs upgraded Ford to a buy on Wednesday with a $6 price target, but this column looks more closely at the bear case issued by Credit Suisse.)

At this point, investors must wrestle with a pair of key questions. First, should the stock get credit for possible market-share gains and cash-flow growth resulting from the deep distress at its domestic rivals? And second, is the company (and its equity) really out of the woods in the midst of this deep economic crisis?

Friday's quarterly conference call will enable investors to get a better read on key balance-sheet and expense metrics. And it will allow investors to stress-test the assumptions that yielded the above-noted $3 price target.

When looking at the automakers, the key assumptions revolve around industry sales volumes and relative market-share strength. The industry typically sold 16 million to 17 million units a year in good times but will likely sell fewer than 10 million units in 2009. Goldman Sachs, in its Wednesday upgrade of Ford, predicts that industry sales will hit 11 million this year, on expectations that a "cash for clunkers" program will be enacted.

Stock quotes in this article: F, GM 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs