Company Focus: Ford Motor Company

May 29, 2012 James Heinsman Company Spotlight

The Ford Motor Company has been traveling down a long roller coaster of a road. In 2005 Ford, one of the nation’s oldest car manufacturers experienced a tumbling of its credit rating down to junk bond status (Ba2 and even lower by Moody’s estimation.)

Last week Moody’s put Ford’s credit rating back to investment grade (Baa3) with a positive outlook towards the future. Reasons for the improved status? A strong showing in North America; excellent capitalization; and an expectation of continued business discipline.

Because Ford has the best refresh rate of all the original equipment manufacturers (OEMs) for four model years analysts believe that will result in increased market share for Ford. Ford has been pushing hard since 2008 to reorganize and optimize its product base. The results have been fruitful; and impressive turnaround rate which will last well into the future.

Ford has shown record first quarter profits in 2012, which need no elaboration.  Ford’s showing is strong in North America, and has shown a higher than expected cash conversion rate.

 

Ford Motor Company, junk bond grade, Moody’s,

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