Both Ford and GE, two American car companies that have held important relevance to the country, have recently received positive buy ratings from analysts who are predicting an upside in both of their troubled management strategies and their stocks alike.
CNBC’s Jim Cramer stated that the decline of these two companies were due to strategic errors in management and decreasing oil prices.
“In a race to the $10 level, Ford may have an edge with a lower price-earnings multiple, which is the number of times investors are willing to pay up for a share in a company’s earnings. GE is also more expensive on a cash-flow basis.” Cramer said.
General Electric ran into issues with overseas acquisitions and made out long-term care insurance contracts that were underpriced, leading to problems on the balance sheet. While Ford has been rotating through multiple CEOs over the past decade and making too many small cars as gasoline prices declined over the past few years.
“In short, Ford is a much clearer value play,” Cramer explained, “[their] core auto market is coming back now, and the F-150 is going to go electric in a couple years. Plus, Ford’s got more momentum, and it’s also much closer to the finish line.”
“The F-150 is going to go electric in a couple years”Jim Cramer, Mad Money
The Bronco is one of the most exciting new mainstream vehicles – if it can produce the kind of sales and halo effect as the Jeep Wrangler and if there’s a roadmap for an electric version, Ford has a bright future ahead. Also, don’t forget their $500 million investment in electric pickup and SUV maker Rivian.