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Monday, January 31, 2011


Picked me up some Ford. Will enter a second position if 14.70s are seen.

Not that valuation or dividend has anything to do with my purchase of F right now, my decision is mainly technical, but those selling Ford are loosing sight of their profitability. Ford will re-instate their dividend, and around 15 it will be a nice one. The chatter that I see is that F should produce $11B in 2011. With 3.5B shares outstanding, they will be able to issue $1 dividend within a year. But to be conservative, lets just say w/in 2 years.

Here are some operating profit breakdowns for 2011, from their guidance and web chatter:

1. 13M vehicles sold (Ford's guidance)
2. $2B from Credit division (Ford's guidance)
3. 5.5B CapEx (Ford's guidance)
4. $800 profit per vehicle (My assumption as an average. But a realistic analysis would break it down per region. For me, a base case is sufficient. Chatter that I have seen is that it is much higher. More like +$1,000 for North America.)

So basically operating profits are about $12.4B. With estimated CapEx its $6.9B

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