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Cars and Drivers

Upgrading Ford (F)

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By Douglas A. McIntyre Updated Published
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Ford Motor Co. (NYSE: F) is probably one of the only ways to bet on the big Detroit Auto Show this week, but the stock was trading at 52-week and multi-year highs today on what might seem as unlikely news if you were looking at the economy just a couple of quarters ago.  It seems that most debt ratings agencies have been in downgrade mode for most of 2009, but 2010 is off to a new start and today Ford received a positive call from an independent ratings agency.  Fitch has raised Ford’s issuer default rating for both Ford Motor Company and for Ford Motor Credit Company.  The rating went to ‘B-‘ from ‘CCC’ and what is perhaps more important is that Fitch said the outlook remains Positive.

Today’s hike was based upon an improved macroeconomic environment, but also noted was Ford’s current cost and margin trends.  The ratings took into consideration Ford’s competitive products, its future business, the liquidity, and current and future cash flows.  The agency believes that Ford will now be cash flow positive in 2010 as the US market gets back to 11.5 million annualized units later in 2010 and 12 million annualized sooner than expected.

The agency further noted that Ford has access to capital for its retail and dealer financing.  What is perhaps the most important issue is that with the criteria being positive after already under review, Fitch noted that the meeting of this criteria will remain a driving force for future upgrades.

Ford closed up 3.6% at $12.11 on an unofficial closing bell basis today, and the stock hit a 52-week high of $12.14.  That is actually close to a 5-Year high.

JON C. OGG

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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