Stock Brawl: Focus on Ford
The focus is on Ford today on our weekly stock brawl on the Closing Bell with Maria Bartiromo.
Ford shares have been on a tear, nearly doubling in the past year. The automaker has finally turned a profit, delivering four consecutive quarters of income growth, the longest streak since 2005.
But not everyone is buying the good news. Last month, notable short seller Jim Chanos increased his short positions on the stock.
This raises the question: to buy or not to buy FORD?
We’ve got two experts on the opposite side of the fence. George Magliano, Director of Automotive Industry Research at HIS Automotive is pro-Ford. Harry Rady, CEO of Rady Asset Management is looking to short the stock. Rady’s firm has $250 million under management.
THE BULL ARGUMENT
Magliano is impressed with Ford’s current leadership. Mulally has done a great job managing the company onto the path of profitability. Mulally has been very smart, “to put a plan in place, stick to it and let his executives run the show,” says Magliano.
Magliano expects profits to continue to grow at Ford as the market conditions improve. Speaking of improvements, Ford has ramped up its designs and style of its global small cars, the Focus and Fiesta. Magliano says “Ford now the alternative to GM, Chrysler and Toyota .”
THE BEAR ARGUMENT
Rady is worried about Ford’s business because it’s a “low margin business with high fixed expenses”, owned and controlled by the union. Rady's view echoes that of Jim Chanos who highlighted concerns over upcoming contract negotiations with the UAW.
Besides that, Ford still has over $27 billion of debt on its books.
HAVE YOUR SAY
Would you buy Ford at current levels - cast your vote and post your comments here on Ford. Check out stock brawl at 340PM ET.
- Ford's Mulally Out to Make Lincoln World Class Brand
- Ford Blocking Text Messages in Cars—A Good Start
- The Dow 30 in Real Time
- The CNBC Stock Blog
Questions? Comments? Write email@example.com