Ford (F): A Flagship ‘Epicenter’ Stock With EV Upside and Great Management

In a world where Elon Musk is building electric cars and spaceships and launching his cars into space with his spaceships, Ford may seem like your father's grand-fathers, and you can't say this for many companies, but maybe even great-grandfather's stock. We think this sentiment couldn't be further from reality. Aside from ample idiosyncratic tailwinds, which we will discuss further below, we also believe that Ford is bringing to fruition the fate we have predicted for so many ‘Epicenter' stocks; booming post-pandemic demand for their products, significantly better operating leverage, and thus earnings per share, and the type or do-or-die cuts and restructuring that only true crises can engender.

Ford has an exciting lineup of new models, credible plans to expand internationally, has made impressive and tangible strides in innovation, and its prodigious lending arm, Ford Credit, just had its best year in well over a decade. The last point: Ford’s massive financial services subsidiary has been the lynchpin in bearish arguments for why the company would falter. In what will likely be a very hot post-pandemic economy with a steepening yield curve, this supposed albatross will likely create significant upside that is not predicted by historically informed forecasts.


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