Is Today's Big Sell-Off of Ford Shares Shortsighted?

Ford announced earnings today, and the market was not happy with the news; shares sold off by more than 7%. In this video on today's "Stock of the Day", host Mark Reeth and Fool analyst Taylor Muckerman take a look at some of the high costs Ford will be facing in 2014 that have investors cutting and running today. Apart from costs related to its One Ford program, designed to retool and unify its business structure and corporate culture worldwide, Ford will also be releasing 23 brand-new or highly refurbished models in several markets in the year ahead, which spells high near-term costs and compressed margins.

But is this news really as bad as the market seems to think? Taylor discusses in the video why this sell-off seems shortsighted for long-term investors. Not only does he cite the growth that Ford's new models will drive beyond 2014, but the company also announced that it has cut its legacy pension plans in half. Ford's legacy costs have long been a weight hanging around the neck of the company's share price. Taylor sees that a big reduction of these costs, and long-term growth for the company, are factors that offset the company's short-term compressed margins and lowered guidance for 2014. He views this sell-off as a very interesting possible buying opportunity for those looking to build out a position in Ford.

The coming boom in this emerging auto market
U.S. automakers boomed after WWII, but the coming boom in this emerging auto market will put that surge to shame! As consumers in developing countries grow richer, savvy investors can take advantage of this once-in-a-lifetime opportunity with help from this brand-new Motley Fool report that identifies two automakers to buy for a surging overseas market. It's completely free -- just click here to gain access.

The article Is Today's Big Sell-Off of Ford Shares Shortsighted? originally appeared on

Fool contributor Mark Reeth has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool recommends Portfolio Recovery Associates and Visa. The Motley Fool owns shares of Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.