Analyst Note
| David Whiston, CFA, CPA, CFE |Ford has badly lagged the S&P 500 index since reporting first-quarter results on April 27 and is a 5-star-rated name. We feel the stock’s downward pressure is a function of many variables mostly beyond management’s control and we continue to feel the stock is undervalued due to taking a long-term view. We do not dismiss the severity of inflation, fears of a U.S. recession, uncertainty from the war in Ukraine, and China COVID-19 lockdowns; however, we feel these items are not permanent, albeit items like inflation are likely not ending soon. When there’s major fear in the markets, auto stocks, due to their cyclical and capital-intensive nature, selloff drastically due to severe negative sentiment and investor time horizons abruptly shortening. For those reasons we would not be surprised to see Ford stock fall below $10 soon, but we think the stock is undervalued for the long-term investor willing to tolerate further downward moves.