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Why Ford Jumped 12% in November

What happened

Ford Motor Co. (NYSE: F) continued to push forward in November, beating the market with a 12.4% increase in its stock price, according to S&P Global Market Intelligence.

The U.S. auto manufacturer outperformed the S&P 500, which was down 1%, and the Nasdaq 100, which was up 1.9% in November. As of Dec. 3, Ford was trading at about $19 per share and was up about 117% year to date (YTD).

Image source: Getty Images.

So what

Ford's stock price did something in November that it hasn't done in about 20 years -- it closed at over $20 per share. It has hovered around that number ever since and is currently trading at around $19 per share.

The gains are attributable to sustained high performance, as Ford has been the top-selling U.S. automaker for the past three straight months, including November. That's the first time that's happened since 1974. Sales were up 5.9% in the month, making Ford the only major U.S. automaker with a year-over-year (YoY) sales increase. Its retail sales market share climbed 2.7 percentage points to 13.8%.

It also continues to be a leader in electric vehicles, as EV sales grew three times faster than the overall market in November. Ford sold a record 11,116 EVs last month -- up 153%, led by the Mustang Mach-E and F-150 Hybrid. Fordʻs EV market share is now 10%, up almost double from 5.4% a year ago.

Pickup truck sales increased 15.8% YoY, with the F-Series up 14.6%. The F-Series is on its way to finishing the year as the top-selling truck for the 45th straight year.

Now what

In November alone, Ford took some 74,000 new vehicle pre-orders, up from 64,000 last November. The sales numbers for Ford are even more impressive when you consider the industry has been struggling with the chip shortage. But Ford has been in a great position, as its inventory has improved since the summer while practically every other automaker is dealing with tight inventories due to supply chain issues and the chip shortage.

The company is also coming out with the all-electric version of the F-150, the Ford Lightning. That will launch in the spring of 2022 and has 160,000 pre-orders.

These factors all put Ford in a good position for continued success in the near term. Investors will also like its low valuation, with a forward price-to-earnings (P/E) ratio of 9.5 and a low price/earnings-to-growth (PEG) ratio of 0.17, which means it is undervalued compared to its expected future growth.

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Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.


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