Should You Buy and Hold Ford Stock to Beat the Market? History Says That's Not a Brilliant Move.

Core Viewpoint - Ford's stock presents an ultra-cheap valuation that may attract investors seeking significant returns, despite historical performance suggesting limited long-term growth potential [1][3]. Group 1: Sales Performance - Ford reported an 8.2% year-over-year increase in U.S. unit sales for Q3, with key models like the F-Series, Mustang Mach-E, Expedition, and Bronco performing well [1]. - The positive sales momentum has contributed to a 15% rise in Ford's shares as of October 10 [1]. Group 2: Historical Returns - Over the past 10 years, Ford shares have generated total returns of 33%, and over 20 years, 150%, both of which lag behind the S&P 500 index [3]. - The expectation for outsized long-term returns from Ford is not supported by historical performance [3]. Group 3: Business Characteristics - Ford's business is characterized by low growth, weak margins, significant capital expenditures, and cyclicality, indicating it may not be a high-quality company [4]. - The company's valuation remains low, with a forward price-to-earnings ratio of 9 and a dividend yield of 5.26%, which may seem attractive [5]. Group 4: Valuation Outlook - Despite the cheap valuation, there is no indication that the market will expand Ford's valuation in the future, as the company lacks traits that typically attract investor rewards, such as fast growth and durable demand trends [5].