Ford: Buy, Sell, or Hold?

Core Viewpoint - Ford's stock performance in 2024 has been disappointing, with shares down 19% and a total return loss of 13%, significantly underperforming the S&P 500's 25% return [1] Group 1: Positive Aspects - Ford's Pro segment, which serves business customers, has shown remarkable revenue growth of 19% year over year over the last nine months, outperforming the overall business [2] - The Pro segment also boasts an impressive third-quarter operating margin of 11.6%, indicating strong profitability [3] - Ford's current valuation is attractive, with a forward price-to-earnings ratio (P/E) of 5.7, significantly lower than the S&P 500's 21.4, suggesting a depressed valuation [4] - The dividend yield stands at 6.21%, appealing to income-seeking investors and providing ongoing payouts for current shareholders [5] Group 2: Negative Aspects - Despite the success of the Pro segment, Ford's overall growth remains low, with a third-quarter 2024 revenue of $46.2 billion only 25$3.7 billion operating loss in the first nine months of 2024, adding to a $4.7 billion loss in 2023 [8] - Ford lacks an economic moat, with a low return on invested capital (ROIC) of 1.8%, compared to the S&P 500 average of 10%, raising concerns about its competitive position [9] - The automotive industry is capital-intensive, requiring significant investment in research, development, and labor, making it less attractive for prospective investors [10] - Ford's disappointing track record for shareholders suggests that the stock may be best avoided [11]