Ford’s Terrible Five-Year Stock Performance
While the S&P 500 soared and rival GM recovered, Ford kept finding new ways to stumble under CEO Jim Farley, and the reasons behind its five-year slide reveal a company struggling to hold its ground in almost every market it…
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Ford’s (NYSE: F | F Price Prediction) stock is down 18% over the last five years, while the S&P 500 is up 75%. Ford argues that its dividend makes up some of the difference. Investors in the stock itself have not bought into that story. Rival GM’s (NYSE: GM) stock is up 40% over the period. Ford has done little over the last half-decade to help the stock, unless the “little” is a series of unforced errors.
CEO Jim Farley has held the top job for six years, so almost all of the drop has come on his watch.
Ford held a strong position in the US fossil-fuel car industry. Most of it came from its SUV and pickup products. The F-Series full-size pickup has been America’s top-selling vehicle for over four decades. It is 37% of Ford’s US sales today. Ford hasn’t been able to change that, which makes it something of a one-legged stool in its home market.
Ford’s China and Europe businesses were once solid. That is not the case anymore. Ford’s sales in Europe were down 17.7% for the first eight months to 171,670. That puts it behind Chinese EV company BYD, which grew by 163% to 177,752.
CNBC recently reported, “Ford’s own language for what’s happening is more revealing than any outside description could be. The company describes its China unit’s strategy as building ‘in China, for the world.’” In other words, Ford sales in China are poor.
Among the world’s three largest car markets, it is only doing well in one–the US. And Ford barely held on to third place in third-quarter unit sales. It barely edged out South Korea’s Hyundai Motor.
Ford’s move in and out of EVs has been so well covered by the press that it is not worth mentioning.
Finally, Ford’s new move into EVs is a small, inexpensive pickup. The Fathom goes on sale a year from now. It is more evidence that Ford cannot turn on a dime to get models out the door. The Fathom is built on Ford’s unproven Universal EV Production System.
Ford’s stock has had a horrible five years. Nothing on the horizon suggests that will change.
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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.
