Why Ford (F) Stock Is Down Today

NEW YORK (TheStreet) -- Ford  (F) shares dipped 0.28% to $17.55 in afternoon trading Wednesday after the U.S. automaker reported a 0.4% year-over-year increase in August sales, which still beat analysts' expectations.

Ford sold 222,174 vehicles last month, compared to 221,270 in Aug. 2013. Analysts expected approximately 217,000 sales, which would have represented a 1.5% year-over-year decline.

Sales of the Fusion, the company's best-selling vehicle, rose 19.5%, while Escape SUV sales rose 8.5% and Explorer SUV sales surged 25.4%. The Fusion sold 29,452 units last month, an August record for the compact car.

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Separately, TheStreet Ratings team rates FORD MOTOR CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FORD MOTOR CO (F) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, increase in stock price during the past year, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Automobiles industry average. The net income increased by 6.3% when compared to the same quarter one year prior, going from $1,233.00 million to $1,311.00 million.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Despite the weak revenue results, F has outperformed against the industry average of 11.5%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • FORD MOTOR CO has improved earnings per share by 6.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FORD MOTOR CO increased its bottom line by earning $1.75 versus $1.42 in the prior year. For the next year, the market is expecting a contraction of 23.7% in earnings ($1.34 versus $1.75).
  • You can view the full analysis from the report here: F Ratings Report

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