An Income Opportunity for the Long-Term


open road ahead

(CC image by peterichman
on Flickr)


Check out the video below, which is from my live stream for traders and active investors, to learn why I like Ford Motor Company (F).


 

As I explain in the video, Ford is the most forward-looking of the major automakers.  (Tesla is not a serious automaker yet – don’t believe all the hype.)  Ford has been willing to take a chance on future mobility technologies because their largest voting shareholder, the Ford family, understands that if a company doesn’t innovate, it dies.  The tech titans of the world, like Google and Apple, would love to sink their teeth into the auto industry.  And they are already trying to do it.

Wall Street has frowned upon Ford’s approach, so they’ve pushed the stock price down so far that the dividend yield has reached 5.3%.  Why?  Wall Street tends to have a “value-extraction” mindset instead of trying to build long-term value.  For instance, activist investors and private equity firms constantly push for more debt, buybacks, and acquisitions to drive short-term value.  They are less concerned with the company’s cash flows over a period of many years, and more concerned with rewarding companies like GM that churn out gas-guzzling trucks and SUVs with no regard for tomorrow.  But if you want to build wealth over your lifetime, like I do, you should love a company like Ford that has the courage to take control of its future instead of waiting until it is too late.   They have begun to transform Ford into a company that will not just build cars as we know them today, but will provide various forms of transportation that meet society’s needs in 2020 and beyond.  In February, they invested $1 billion into Argo AI, a startup focused on developing technology for self-driving vehicles.   Learn more about Ford’s initiatives around future mobility.

As with any investment, make sure to review the company’s annual report and other SEC filings to get a good understanding of the company before investing.  Pay particular attention to the disclosures of potential risks in those filings.  You can find investor info for Ford here.  Just because this company is right for me right now doesn’t mean it is necessarily right for you.

I own shares of Ford Motor Company as of the publishing of this post.  View other important disclaimers on this page.


Be Selective

Most stocks are priced at lofty valuations right now, so we’ve got to be selective.  While the bull market may last a bit longer, stocks whose values have grown out of line with their true cash flow potential will suffer a hard landing as deflationary pressures resume.  So, don’t just blindly buy the market index.

I’m still on the hunt for long-term portfolio holdings that can give me a reliable yield and are fairly valued or undervalued – so stay tuned for future Dividend Stock of the Month posts.

In case you missed it, here’s the last dividend stock I highlighted.  It’s had a nice run since I released the video!


The Torpedo Trading Live Stream

Watch more live streams like this at https://www.twitch.tv/torpedotrading and interact with me in real-time.  Follow the channel, and you can receive notifications when I go live.

If you miss a stream, highlight clips like this one can be found at my YouTube channel.