October Stock of the Month

This month's Stock of the Month is: Ford Motor Corp (F).


Ford is a comeback story of the ages.  Ford has a rich history that certainly have had highs and lows.

Henry Ford created Ford Motor Company in 1903 and created the revolutionary Model T.  For the longest time, Ford dominated the little competition they faced.  Ford successfully survived the Great Depression and had decades of prosperity and dominance in the car market.  It can be said that Ford began its decline in the late 1970s.  This is when Toyota and Honda were becoming very popular in the United States and were said to be more "reliable" than the declining Ford models.

Ford experienced relatively low levels of sales compared to its Japanese counter parts for many years...until recently.  Once the recession hit the world in 2008, it was as if Ford rose from its decline into the top tier once again.  While Toyota and Honda are experiencing major recalls on safety issues, Ford has outsold all other car companies for almost a year straight.  GM brands have also had some issues with recalls but have overall done well but not as well as Ford.

The government's "Cash for Clunkers" program, combined with incentives and a new image have once again shot Ford up to number 1.  Now Ford is considered a major growth stock that will rise with the correction of the economy.  Ford's management team has a clear plan for the future and has clearly showed that American Made is back and in style.

Fundamental Analysis: As far as the balance sheet goes Ford is pretty healthy with about $18.32M in cash and $109.63M in investments. Ford has $117.38M in total debt. The PEG ratio is a way undervalued at .41 and a P/E of 7.74. Ford Motor is very undervalued and will produce great gains over the long term as the recovery continues. It is also important to note that institutions own 63% of shares of Ford Motor.



Technical Analysis: The RSI shows a signal of neither overbought or oversold.  Bollinger Bands point to a higher stock price as they are beginning to opening up.  The MACD shows a neutral signal and the Williams%R shows a moderately overbought senario.  However, it is not bad to where I would be worried.  Latly, the Stochastics shows a mild overbought senario, which again, I would not be worried about.

Outlook:  Ford (F) is currently priced at $13.01 (as of October 5, 2010).   Over the next 12 months we are projecting a $15.50/share and higher.  If Ford can capitalize on its growth in Europe and China, as well as the US, Ford could be hitting $20 by 2012.

Disclosure: No position at time of writing.

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. These trades and ideas are the opinions of the crew of Invest Chief. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.

Stock of the Month: September

September is off to a great start with three straight days of decent gains.  Although the unemployment rate inched down to 9.6%, the Dow Jones rallied about $130.  I must say this is quite nerve racking because September and October are known as the "crash months" and haven't treated stocks well historically.  On a brighter note, there are bright spots and buying opportunities that you should be going after.  This month's stock has been beaten down but is certainly reliable when it comes to beating estimates each quarter.

The Stock of the Month for September is Balchem Corp (BCPC).
Balchem provides specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries in the United States and internationally.  Believe it or not, every time you eat cereal, you are using Balchem's products.  As you can see by the graph and my analysis, there are signs of a bullishness. 

On the fundamental side, Balchem is very strong.  As of June 30, 2010, BCPC has $200,339 worth of assets, and only $34,928 in liabilities (including $1,308 in short term debt and $3,815 in long term debt).  Balchem has significantly lowered its debt positions which is a very good sign of stability and a very low, low risk of default.   BCPC's PEG (price/earnings growth) is 1.83.  This is a good sign of growth in the future.  EPS is $1 (very good), P/E is around 25.  BCPC pays a weak dividend of .3%, but the company is well run and managed which shows in its continued success at beating estimates.

Invest Chief's 12 month projection for Balchem is $30.75.  Watch for updated news and earnings.  We will keep keep updating the status of Balchem as updates occur.

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.