Equity investors usually don’t go shopping in the automotive industry when the economy is losing pace. But the Chief Investment Officer of Bryn Mawr Trust says it makes sense to treat Ford Motor Company (NYSE: F) as an exception this time.
Ford is investing in EV
According to Jeff Mills, the legacy car manufacturer is a great pick here both from technical as well as the fundamental standpoint. Speaking with CNBC’s Kelly Evans on “Power Lunch”, he said:
Ford is investing in growth. The EV spending between now and 2026, somewhere around $50 billion. I think they’ll be able to execute. And the technicals line up as well. The stock has rarely traded this cheap throughout its history.
Ford is currently down more than 45% from its year-to-date high. The stock trades at 6.5 times forward.
Auto inventories to improve
Wall Street, on average, sees a more than 30% upside in Ford. Also on Tuesday, Mark Fields – former CEO of the Detroit automaker forecast auto inventories to improve in the coming months.
In the next six to twelve months, you’ll continue to see the auto industry improve the supply chain and microchip issues. So, I think you’ll see inventories start to come back up versus the very depressed levels they are at right now.
In April, Ford blamed its stake in Rivian for a hit to profit in the fiscal first quarter. It, however, reiterated its earnings guidance for the full year.
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