Should Ford Motor (NYSE:F) Be Added To Your Watchlist Right Away?

Ford Motor Investors sometimes base their decisions on the notion of finding “the next big thing,” even if that means purchasing “story stocks” that generate neither revenue nor profit.

Ford Motor
Ford Motor

Ford Motor

However, the truth is that when a business consistently loses money over an extended period of time, its investors will typically take a portion of those losses.

A company that is operating at a loss has yet to demonstrate its viability with profits, and eventually, outside funding may stop flowing in.

Therefore, if this concept of high risk and great gain is not appealing to you, you might be more interested in successful, expanding businesses like Ford Motor (NYSE:F).

This does not mean that the company is the finest investment opportunity available, but profitability is an important factor in business success.

Because investors and investment funds want profits, share prices often rise when EPS (earnings per share) results are favourable.

Therefore, a company normally receives more attention from potential investors when its EPS is expanding. Ford Motor’s EPS increased from US$0.72 to US$2.24 in just one year, which is astounding.

Although it is challenging to maintain growth at that rate, it is encouraging for the company’s outlook.

Regarding the sustainability of the recent profit rise, careful evaluation of revenue growth and earnings before interest and taxation (EBIT) margins can be helpful.

Ford Motor’s operating revenue was less than its revenue for the previous twelve months, which could skew our study of its margins.

Insiders having a sizable portion of a US$53 billion firm like Ford Motor is not something we would have anticipated. But it’s encouraging to see that there are still incentives to align their behaviour with the shareholders because of their investment in the business.

Ford Motor
Ford Motor

Notably, they hold an impressive interest in the business valued at US$696 million. This kind of risk-taking by management will be valued by investors as it demonstrates their dedication to the company’s future.

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