Why did Ford Motor Company's (F) stock hit the gas pedal?

F has had a difficult start this year, losing 18.5% of its worth since the beginning of the year. hey finally found the gas pedal and floored it. Ford's stock is up by 6.6%
 
WAN CHAI, Hong Kong - May 11, 2022 - PRLog -- You may credit Bill Ford, Ford's executive chairman and the company founder's great-grandson for that. Ford (the chairman) acquired more than a quarter million shares of Ford (the company), according to Barron's magazine and this disclosure appears to be strengthening investor confidence that Ford stock is a buy.

Ford (the chairman) spent $4.5 million to buy 267,697 shares of Ford (the stock) at an average price of $16.81 per share. This was his first insider buy of the year and it appears to have come at a good moment. He's made a handsome profit of 5.5% in just five days, or around 1 percentage every day.

So far, everything has gone well. Will Ford's stock continue to rise? That is the question that  investors should be asking. Thankfully, I feel the answer to this question is affirmative.

Consider this: Ford's net profits were about $18 billion last year. Given that more than half of that profit came from one-time things that are unlikely to happen again, I wouldn't buy Ford now merely on the basis of its P/E ratio.

However, Ford's free cash flow (FCF) is a very respectable $9.5 billion and when compared to the company's market capitalization of $67 billion, that works out to a price-to-FCF ratio of only 7.0, which strikes me as a very attractive price to pay for a company with growing profits and a strong 2.4% dividend yield.

To summarize, Bill Ford's recent insider acquisition of Ford shares was the right decision for him and outside investors should strongly consider following in his footsteps.

Established in 2015 and headquartered in Hong Kong, Enbridge International Consulting Limited is an independent boutique asset management Firm committed to serving retail and institutional investors as well as affluent high net worth individuals. As a boutique Firm, our ability to offer customized financial advice is second only to the vast variety of financial products and services at our disposal. We focus on investment vehicles that deliver significant appreciation and an absolute sustainable return.  Please visit our website https://enbridgeconsulting.com/

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