Will Ford (F) Stock be Helped by North Africa Operations Expansion?

NEW YORK (TheStreet) -- Ford Motor (F) announced today that it is expanding its presence in North Africa as a part of its global growth plan and intends on setting up a new sales office in Morocco and wants to double the number of car parts purchased in the country.

The automaker's expansion is the latest boost to Morocco's automotive industry, the Associated Press reports, adding that it has grown substantially over the last few years with the help of investments by foreign companies.

Shares of Ford are lower by 0.23% to $15.23 in late morning trading on Tuesday.

"Morocco is a great place to do business. Morocco has a very skilled and motivated workforce, a growing automotive supplier ecosystem, access to ports, free and fair trade agreements and a very pro-business mindset. Ford is delighted to partner with Morocco to expand our operations in North Africa," Kalyana Sivagnanam, Director, Ford Middle East & North Africa said in a statement.

Ford also said it is bringing seven new vehicles to North Africa this year and that the growing automotive supplier network in North Africa will supply parts to Ford's assembly plant in Valencia, Spain and other operations.

"In order to support our production expansion just across the Mediterranean in Valencia, the amount of parts Ford sources in Morocco and North Africa will increase exponentially," Sivagnanam added. "This translates into thousands of indirect jobs and millions of dollars in investments."

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 several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its generally strong cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • Net operating cash flow has slightly increased to $2,413.00 million or 8.69% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.04%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.6%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • FORD MOTOR CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, FORD MOTOR CO reported lower earnings of $0.78 versus $1.75 in the prior year. This year, the market expects an improvement in earnings ($1.60 versus $0.78).
  • The gross profit margin for FORD MOTOR CO is rather low; currently it is at 18.58%. Regardless of F's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.72% trails the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Automobiles industry and the overall market on the basis of return on equity, FORD MOTOR CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • You can view the full analysis from the report here: F Ratings Report

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