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Goldman Sachs 'Buy' List to Consider Now

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4. Ford (F - Get Report) is the most profitable U.S. carmaker. Its stock has dropped 16% in 2011. It has gained 20% over a six-month span. Ford's fourth-quarter adjusted earnings decreased 31% to 30 cents, missing the consensus target by 38%. Sales, down 6.9%, exceeded expectations by 14%. Ford's gross margin widened from 18% to 19% and the operating margin expanded from 6.4% to 6.6%. Ford held $29 billion of cash and equivalents and $104 billion of debt, a 21% year-over-year drop, at quarter's end. It is running a shareholders' deficit of roughly $673 million.

Ford's stock sells for a trailing earnings multiple of 8.8, a forward earnings multiple of 7, a sales multiple of 0.4 and a cash flow multiple of 4.6, 43%, 74%, 45% and 21% discounts to automobile industry averages. Its PEG ratio, calculated by dividing the trailing P/E by analysts' terminal earnings growth forecast, of 0.6 signals a 40% discount to estimated fair value. Of researchers evaluating Ford, 11, or 61%, rate its stock "buy", six rate it "hold" and one ranks it "sell." Goldman forecasts that Ford will rise 42% to $20. Barclays, rating Ford "overweight", and JPMorgan, rating Ford "neutral", also have $20 targets. In contrast, Citigroup expects a rise to $17.

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