Ford Motor (NYSE:F) breathed a bullish breath last week after unveiling an F-150 electric vehicle. The stock jolted higher because investors view the stock as an internal combustion engine and an EV play.
Holding F stock is like getting Workhorse (NASDAQ:WKHS), Nikola (NASDAQ: NKLA), and Lordstown Motors (NASDAQ:RIDE) for free. The difference is that those three firms are unlikely to survive in the next year. Ford has plenty of credit lines on hand to invest in the EV market.
Furthermore, the SPAC spinoff adds value to the stock in a sum of the parts analysis.
Bloomberg reported that Ford might spin off its electric scooter business. This will unlock the P/E multiples compression hurting the share price. The market is unlikely to value Ford as high as Tesla (at 100 times P/E). Still, any forward P/E above eight times would reward ailing investors.
Risks
Ford stock often sells off after a strong run. Weak management, heavy bureaucracy, and endless recall often hurt the company’s performance. The dividend suspension is still a headwind, too. Without rewarding income investors, the stock has limited upside.
Investors should brace for profit-taking in Ford stock. F shares are a good long-term investment for shareholders who only buy on the dip. From there, sell whenever it rips higher.
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