Time to Buy Ford (NYSE:F)

We all know that Ford Motor Company (NYSE:F) left the other automakers in the dust when they rebounded from 2009 lows.  However, its run may not be over yet.  In the wake of Toyota’s woes that include possible criminal probes and congressional hearings, Ford seems to be benefiting strongly as it grabs up market share.  That’s not all though, Ford is one of the 2010 darling growth stocks.  Read on.

Ford has shown intense resiliency as they have posted an average earnings surprise of 114% over the last four quarters.  The price to sales ratio is a very attractive 0.3 as compared with the broad S&P market’s 1.4, indicating share price is cheaper.  Couple that up with a forward rice to earnings ratio of 12.9, which is still lower than the S&P’s 14.7 and you have some better confirmation that the share price is indeed attractive for Ford.  Finally, with a projected EPS growth for the next year at over 55%, we see that Ford fits the model for a strong growth stock.

Checking the chart for Ford, we see that the recent sell off in the broad market has drug shares down some, but they rebounded yesterday.  The stock is signaling very strong support at the $11 level.  The daily chart formed a cup-with-handle pattern (info for cup-with-handle pattern) recently and appears to forming a new base with that $11 support.  It may take some time to break out of the current base, but longer term investors may be rewarded handsomely if shares are purchased.  The primary downfall for Ford with now is that there is no dividend yield as the company is picking itself up by the boot straps and getting back to business.

Disclosure:  Positions in Ford through ownership of ProShares Ultra S&P500 (ETF) (NYSE:SSO) at the time of the writing.