Here Is Why Shares of Ford Are a Value Trap That Is Best Avoided

Ford Motor (F)  is trading at about seven times forward earnings estimates, making it appear to be a bargain proposition.

But that is a mirage. Ford Motor's stock price factors in the company's recent poor performance records, and it is poised to fall further.

Ford Motor is losing market share in both Europe and North America. Factories are being idled, and the company has come under fire from President-elect Donald Trump.

There are only a few factors working in Ford Motor's favor including that the company's trucks division has reflected healthy movement, China has been largely positive and the 5%-plus yield is tantalizingly attractive.

However, Ford Motor's ability to sustain is dividends is uncertain and vulnerable. In fact, peer General Motors is also battling a similar set of challenges.

Ford Motor's strongest market -- the U.S. -- is under a cloud. Third-quarter pre-tax profits in North America plummeted 57% from a year earlier.

And as sales declined, costs increased correspondingly.

Ford Motor has lost its way, and the lack of direction is evident in its retail sales numbers, showing that customers are clearly unhappy.

The entire automobile landscape is in the middle of a paradigm shift.

Electric-vehicle owners prefer Tesla Motors, despite its sluggish delivery standards.

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