Ford just announced a change in CEO to a guy who did a turnaround in a smaller company in a different industry. But, at Ford, he was in charge of their self driving car division.
I get nervous when companies look trendy when they are not. Let’s take a look at some of the facts.
First, analysts are expecting Ford’s earnings to drop 12% this year and only rise 7% next year.
A big reason is rising inventories. Auto companies are seeing increasing inventories which means they can’t sell the cars they are producing which means they will have to cut back production soon.
Yet sales are already dropping! Look at the chart of Total Vehicle Sales and it has broken the previous lows!
Seasonally, June is a slightly poor month for Ford’s price.
Technically, Ford has been in a long bear market but just jumped sharply higher on the CEO change news. It is this rally that I want to use to short the stock or buy a put.
Let’s get short!
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