There's More to Ford than Meets the Eye

NEW YORK ( TheStreet) -- Have you seen the television commercial for the new Lincoln MKZ automobile?

If you haven't you'll probably want to. It takes full advantage of its presidential name connection, which has become a larger part of America's consciousness since the acclaimed motion picture by Steven Spielberg starring Daniel Day-Lewis as Abraham Lincoln.

Just like the brilliance of its captivating new "focus" (which happens to be Ford's best-selling model name) or its exceptional TV commercial, the leadership of Ford Motor ( F) has also captured the attention of the investing world in a way this analyst hasn't seen since the heyday of Lee Iacocca at Chrysler.

Hailed as the only American auto company that didn't ask for a government bailout or loans during the Great Financial Disaster of 2008-2009, Ford is considered by many as one of the top turnaround stories of this decade. Under the leadership of its respected CEO, Alan Mulally, the company is in the black and going strong.

Ford Motor operates through two sectors, Automotive and Financial Services. The automotive sector offers vehicles primarily under the Ford and Lincoln brand names. This group markets cars, trucks and parts through retail dealers in North America, and through distributors and dealers internationally.

It also sells cars and trucks to dealers for sale to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, this sector provides various after-sale vehicle services and products to retail customers, such as maintenance and light repair, heavy repair, collision repair, vehicle accessories, and extended service contracts.

These lucrative products and services are offered under the Ford Service, Lincoln Service, Ford Custom Accessories, Ford Extended Service Plan, and Motorcraft brand names. The Financial Services sector offers various automotive financing products to and through automotive dealers.

Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust -- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.

What's exciting from an investment theme is that all these divisions and segments create multiple income streams that flow down to the bottom line of Ford's diluted quarterly year-over-year earnings. The following one-year price chart illustrates this effectively.

F Chart F data by YCharts

To expand the accessibility of the luxurious Lincoln brand in Asia, Ford is entertaining the idea of modifying Lincoln models before they go on sale in China next year, according to a Bloomberg report Monday.

This is evidently aimed to meet the tastes of wealthy Chinese consumers who often expect to be chauffeur-driven in their luxury cars. "The brand will come to life in China a little differently than here," Jim Farley, Ford's chief of Lincoln and global marketing, told reporters on Monday at the Detroit Auto Show. "We've made several changes, but we haven't shown the Chinese variations of our products yet."

The Bloomberg story noted Mulally is "trying to revive Lincoln and make it a global brand. In the U.S., sales have fallen 65% since peaking in 1990. Lincolns go on sale in China, the world's largest auto market, in the second half of 2014."

Ford may alter its new Lincoln models, such as the MKZ midsize sedan, to attract customers who ride in the back seat of the car.

"MKZ-class vehicles or above are chauffeur-driven," said Farley, who declined to say if Ford is stretching Lincoln models to make back seats bigger. "All the technology we put in for the driver is often someone who is driving the owner. Those are not subtleties. Those are really fundamental product requirements."

Guess what this kind of publicity does for the luxury auto-buying consumers in North America and Europe? You guessed it -- this makes them begin to drool and it helps the MKZ-class vehicles appear very desirable and worth the modest MSRP of nearly $36,000.

Yes, folks, you can drive a "luxury car" with a brand name associated with one of America's most famous presidents for only $36K!

If a picture paints a thousand words, you'd be advised to take a look at the Lincoln Motor Company's Web site. It impressively demonstrates the hype and the elegant design that should help the MKZ-class become a big winner for Ford and its shareholders.

TheStreet's Research Director Stephanie Link and ACTIONALERTSPLUS' Jim Cramer recently commented on this powerfully positive trend in an article titled "10 Lucrative Themes for 2013.

They opined, "In 2013, China stands to be a tailwind for the auto sector and Europe will be cordoned. That means Ford and General Motors ( GM) are going to be huge stocks."

Ford also happens to be Mr. Cramer's favorite auto stock for the year ahead.

Referring again to these rebounding American auto companies, they wrote:"They should be terrific -- particularly Ford, which keeps refinancing and refinancing, and just refinanced a gigantic piece of paper last week. No one even notices anymore. They should. They will when the company reports."

Speaking of earnings reports, Ford brings the news on its latest quarterly results next Tuesday. Analysts' consensus estimate on EPS is 26 cents a share, a whopping 30% increase over the same quarter a year ago.

The average quarterly revenue estimate is for $33.17 billion, a slight increase from the same quarter last year. But this is only the tip of the iceberg, and by some estimates Ford and Lincoln will sell more cars and other products in 2013 than they have since 2006.

The earnings reports in subsequent quarters may surprise to the upside enough to move Ford's share price significantly higher than the consensus estimate. That is one of the big "drivers" (if you'll pardon the pun) of the stock's powerful upside momentum

As the chart above indicates, shares of F have had a sharp run-up already. Risk-averse investors may want to wait until shares experience a correction to $13 or lower before accumulating. From its 52-week low of $8.82 established last summer to Tuesday's closing price of $14.30 on above-average volume, Ford shares have soared 62% already.

My best, educated guess is those who bought shares last year are selling them short and plan on "buying-to-cover" after F cools its wheels and comes back down to earth. That's when yours truly and other patient investors anxious to participate in Ford's amazing comeback will begin to be buyers.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Jim Cramer's protege Dave Peltier finds you Stocks Under $10 picks with explosive upside potential. See what he's trading today with a 14-day FREE pass.

If you liked this article you might like

Closing Bell: LIVE MARKETS BLOG

Closing Bell: LIVE MARKETS BLOG

It Makes Sense That Ford Is Boosting Production of $70,000 Lincoln Navigator

It Makes Sense That Ford Is Boosting Production of $70,000 Lincoln Navigator

Broadcom and Qualcomm, Comcast and Fox - 5 Things You Must Know

Broadcom and Qualcomm, Comcast and Fox - 5 Things You Must Know

Dow Futures Explode More Than 250 Points

Dow Futures Explode More Than 250 Points

Broadcom, Comcast and Everything Else You Need to Know Before You Trade Monday

Broadcom, Comcast and Everything Else You Need to Know Before You Trade Monday