Trade of the Week: Long Ford
Originally published at 10:51 A.M. EDT on June 22, 2015
My long "Trade of the Week" is to buy Ford (F) ($15.21).
* Ford's shares have underperformed those of General Motors over the last four weeks.
* Despite my protestations that we will see "Peak Autos," current industry trends remain strong. That said, as was the case with GM, "peak autos" seem to have been discounted in Ford's modest price-to-earnings multiple.
* The U.S. dollar recently has weakened, which is a plus for auto manufacturers' profits.
* Share price reward-versus-risk ratio seems attractive at current levels.
* My subprime auto lending concerns seem at odds with the data thus far, as delinquency rates are now declining year over year.
Trade of the Week: Shorting MetLife