There was some unfortunate news from legacy automaker Ford (F) today, at least, it was unfortunate for any of its investors who were hoping for share buybacks to inflate share prices. Ford basically snuffed that hope out, but most investors were not exactly unhappy about this. In fact, shareholders were sufficiently pleased to give Ford stock a notch up, and shares gained fractionally in Thursday afternoon’s trading.
Basically, noted Bill Ford, Ford’s executive chair, there were no plans to launch a buyback plan, nor was there any plan to spin off the commercial vehicle operations, which have done quite well for Ford on their own. Ford explained, noting that Ford has done buybacks before, but generally, they do not work near as well as anyone would like.
Further, Ford noted, “Cyclical companies usually buy back when times are good…when the down cycle hits, you wish you had that cash.” Thus, Ford is working to cement itself as a long-term option as opposed to trading future utility for a share price bump at present. As for the commercial division, Jim Farley himself took that one on, noting that Ford Pro is “…so integrated in the company and relies on the benefits of Ford industrially that separating it would have a lot of risks.”
Is the BlueOval SK Plant a Death Trap?
It might be going too far to call the BlueOval SK plant in Kentucky a “death trap,” but reports suggest that it could readily be described as “pretty dangerous.” Granted, any industrial operation comes with a certain amount of danger; that is why OSHA exists, after all. But some of the reports are downright terrifying. A wide range of employees have filed reports with authorities, and currently, there are open investigations connected to 15 separate complaints.
One contract worker detailed sickness from mold in the plant, to which his supervisor responded “Don’t tell anybody.” Another report detailed a training facility that was infested with bats. Emergency exit doors were blocked, and there was a growing risk of chemical exposure. Perhaps worst of all, one report noted that BlueOval SK had a tendency to “…terminate anyone who reports any issues,” and requested anonymity when filing the complaint. BlueOval SK, meanwhile, responded with Facebook (META) and Instagram advertising, calling at least some of the claims “inaccuracies” or even “blatant lies.”
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, 11 Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 9.6% loss in its share price over the past year, the average F price target of $9.82 per share implies 5.07% downside risk.
