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
TheStreet Open House

5 Reasons Ford Is a Better Buy Than GM

By Hilary Kramer of InvestorPlace

NEW YORK ( TheStreet) -- Auto stocks are in the driver's seat this week, and you can attribute the renewed interest in the sector to GM's IPO. The bailed-out automaker's shares are expected to garner very strong investor demand when they go public on Thursday, as many people want to get in on the ground floor of the iconic, yet troubled automaker's future fortunes. The way I see, however, investors should be looking at rival Ford Motor (F) if they really want their portfolios to keep on trucking.

Ford

Over the past year and a half, Ford's turnaround has been nothing short of stunning. Just 18 months after reporting a $1.4 billion quarterly loss, Ford reported record earnings that blew away Wall Street's expectations. The stellar earnings beat caused investors to put the pedal to the metal on the stock, as Ford's shares surged some 15% the week it announced earnings.

Why You Should Focus on Ford

Unlike GM, Ford has a host of other positives going for it, making this Detroit icon the much better stock for investors. Here are my top five reasons to buy Ford shares now.



1) Outstanding Leadership. Driving the operation at Ford is the über-capable CEO Alan Mulally. The turnaround he's engineered at Ford is being called his "hall of fame" performance. Mulally has managed to make Ford a profitable operation again, an amazing feat when you consider just how beaten down the auto industry was in the aftermath of the Great Recession.

2) Growing Market Share. Ford's sales soared 20% in October, with truck sales doing even better. In fact, truck sales are up 28% since the beginning of the year. In all, Ford's market share jumped to 16.7, overtaking Toyota Motor (TM) for the No. 2 spot in the industry.

3) ZERO Employee Benefits Debt. Unlike GM and its huge fiscal employee-benefit overhang, Ford just paid down the final $3.6 billion it owed to its retiree health-care trust last week. That gives the automaker a clean slate when it comes to revving-up its future bottom line.

4) A Wholly-Owned Finance Unit. Ford held on to its finance arm, Ford Motor Credit, which continues to show robust growth. This is in direct contrast to GM, which sold its finance arm (GMAC) in 2006 in a bid to raise capital. In fact, on Oct. 26, Ford Credit reported third-quarter pre-tax operating profit of $766 million, an $89 million improvement from the third quarter of 2009. In addition to the bottom-line bump Ford Motor Credit gives the company, the finance arm also gives Ford an advantage over the competition in financing vehicle loans.



1 of 2

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.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7870 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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