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Ford (F) (I know, I know...)
#11
(01-08-2015, 11:37 AM)cbroncos Wrote:
(01-19-2014, 07:40 PM)Kerim Wrote: As I think I've said elsewhere, I'm not sure that I'd buy F at today's prices. Maybe. But at $9.00 per share, real earnings, and the new Fusion just released, it felt like a pretty safe buy!

I don't think we ever saw $9.00 in 2014 and I doubt we will see it in 2015. What price did you get in at?

I bought my shares for $8.99 each on July 24, 2012, and have never (yet) regretted the purchase.

I just updated my spreadsheet on F however, and am not sure I'd touch it at $15 and above. I've said before that with a cyclical stock like F, I need a much larger margin of safety than I'd need with, say, a consumer staples company. Yesterday's raise was very nice, and with it, Ford sports a very attractive initial yield of almost 3.9 percent. But earnings are languishing and as a result the payout ratio has already climbed to about 50 percent in the four years since the dividend was re-initiated.

2015 earnings projections are pretty good, but with an automaker, those estimates need to be taken with an especially giant-sized grain of salt. And even if they are realized, the dividend growth rate is going to slow way down starting next year, I imagine.

So, while I still like Ford a ton as a company, and will happily continue to hold my shares, I'd need to see some combination of much better earnings or a much better valuation before I'd consider buying more shares.

Just my 2 cents!
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#12
Kerim, when you first brought up Ford, I thought you were a little crazy. Angel I swore I'd never gamble with the likes of automakers again since the Chrysler bailout in the late-70s, early-80s.

Now look at me ... I've been holding DE for a year or two content in the knowledge it could take a big drop in the next several years as the ag market goes through another downcycle and just collect the dividends.

I hope they can at least maintain the dividend for you. Sounds like you've got a decent margin of safety in the price bar another catastrophe.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


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#13
DW,
I know theres some talk of ag market downcycle - but would you care to elaborate? Why do you think the market is going to go down?

We can start another thread on it, if u'd like
R2R
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#14
(01-08-2015, 07:58 PM)Roadmap2Retire Wrote: DW,
I know theres some talk of ag market downcycle - but would you care to elaborate? Why do you think the market is going to go down?

We can start another thread on it, if u'd like
R2R

R2R, I'm not ignoring you, just busy. I've been doing some reading on the topic and am still trying to get a handle on all the moving parts. I'm not specifically talking about ag the commodities but more the market for the equipment suppliers. I'll answer more when I have a bit of time.
=====

“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


Reply
#15
(01-10-2015, 02:35 AM)Dividend Watcher Wrote:
(01-08-2015, 07:58 PM)Roadmap2Retire Wrote: DW,
I know theres some talk of ag market downcycle - but would you care to elaborate? Why do you think the market is going to go down?

We can start another thread on it, if u'd like
R2R

R2R, I'm not ignoring you, just busy. I've been doing some reading on the topic and am still trying to get a handle on all the moving parts. I'm not specifically talking about ag the commodities but more the market for the equipment suppliers. I'll answer more when I have a bit of time.

No worries, DW. Anytime you have. I own ADM and fall in commodities is something that I wonder will occur in the space. Part of their proceeds also go to ethanol production, but now with the fall in oil prices, im sure there will be pressure to cut down the subsidies on that. Whether it'll happen or not, we'll have to see.
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