Posted by: Lauren Young on August 10, 2009
A reader sent me an email today asking if it is a good time to buy Ford (F) stock. In turn, I asked my sources in the investment world what they think. I’ll be posting their responses as they filter in.
Anyone recommending Ford today is probably basing it on the shaky premise that:
(1) The recent pick-up in auto demand is sustainable;
(2) The U.S. auto industry somehow has restored—or will restore—its competitive power;
(3) Ford shares still provide good value despite their sharp rally—from $1.26 per share last November to $8.44 last week.
This doesn’t meant that Ford shares cannot move higher, Weiss says. “They may do just that. But the auto industry recovery is driven more by unsustainable government bailouts than lasting growth in demand, and Ford will have long-term difficulty competing,” he says.
Bottom line: According to Weiss, buying Ford shares now is not an investment. “It’s a high-risk speculation,” he says.
What do you think? Does Ford’s recent uptick signal that the worst is behind the company now?