Ford Plummets: Buying Opportunity or Avoid at All Costs?

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In today's edition, industrials editor and analyst Brendan Byrnes takes a look at Ford and its 5% nosedive on Friday. The huge drop came after the company disclosed Thursday that it could lose more than three times what it lost last quarter in international operations. The first-quarter international loss for Ford was $190 million, so the company could be looking at $570 million in losses outside North America. Europe, where the company is severely underutilizing its factories, is by far the biggest contributor to these expected losses. That, along with other competitors' big supplies of cars and weak demand, pushes prices lower and forces Ford to offer prices so low that it's unprofitable.

But in the following video, Brendan explains that while this is certainly not good news, his bullish Ford thesis remains intact. In fact, he thinks this presents an extremely attractive entry point for long-term investors who are willing to tolerate some short-term volatility.

Despite this recent hiccup, Ford has been performing incredibly well as a company over the past few years -- it's making good vehicles, is consistently profitable, recently reinstated its dividend, and has done a remarkable job paying down its debt. But Ford's stock price is down more than 28% over the past year. Does this create an incredible buying opportunity, or are there hidden risks with the stock that investors need to know about? To answer that, one of our top equity analysts has compiled a premium research report with in-depth analysis on whether Ford is a buy right now, and why. Simply click here to get instant access to this premium report. Or, if you'd rather take a look at a high-growth company outside the cyclical manufacturing sector, check out our special free report "The Motley Fool's Top Stock for 2012," which features a company our chief investment officer uncovered that's revolutionizing commerce in Latin America.

The article Ford Plummets: Buying Opportunity or Avoid at All Costs? originally appeared on Fool.com.

Brendan Byrnes owns shares of Ford. The Motley Fool owns shares of Ford.Motley Fool newsletter serviceshave recommended buying shares of General Motors and Ford and creating a synthetic long position in Ford. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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