Most people around our office know I am a huge soccer fan.
The array of soccer jerseys I wear throughout the week likely gives it away.
Aside from Lionel Messi, one of my favorite players is Steven Gerrard — a former midfielder for Liverpool.
And one post-match quote from Gerrard has stuck with me:
The fans have played a massive part in getting us to where we are, but the job’s not finished.
He knows that fans can motivate athletes in a massive way.
But it’s also true for other things.
Today, I’m going to tell you how fans have brought things back from the dead … including one product for a major American business.
Then, I’ll use Adam O’Dell’s proprietary Green Zone Power Ratings system to tell you if you should become a fan of this company’s stock through purchasing its shares.
Fans Are a Powerful Voice … Just Ask Hollywood
In the midst of an actor and writer strike, Hollywood studios have vastly changed the shows we’ll be able to watch in the upcoming fall season.
These seasons are make-or-break for television shows, actors, writers and fans. Fail to grab an audience … you’re canceled. Make a breakout … your show is set for years.
But, it doesn’t always work that way.
I am a big fan of the sci-fi television series The Expanse. It started on the Syfy channel in 2015, but the network canceled it after three seasons because it wasn’t profitable enough.
So fans banded together and petitioned Amazon to pick the show back up. These efforts included flying an airplane over Amazon Studios with a banner that read “#SaveTheExpanse.” Fans, including the owner of Craigslist and legendary Game of Thrones creator George R.R. Martin, even sent then-Amazon CEO Jeff Bezos personal emails about the series.
It worked … Amazon picked up The Expanse and ran it through 2022.
That’s just one example of the power of enthusiasm in numbers.
Another American company is feeling that same influence now.
Ford and a Lightning Strike
Ford Motor Co. (NYSE: F) jumped into the deep end of electric vehicle (EV) production when it unveiled its F-150 Lightning electric truck in 2021.
But demand was sluggish out of the gate due to the high cost and battery problems. Ford even shut down production to revamp its Ford Rouge EV Center in Dearborn, Michigan.
Then it went a step further… It pulled a Tesla and dropped the price of the EV by $6,000 to $10,000.
And Lightning fans responded.
Last week, the company announced it reopened its Lightning production line and its EV unit chief said Ford saw a “sixfold increase” in new orders for the truck.
So, in a sense, fans spoke out after a price drop and have brought the F-150 Lightning back to life.
But does that mean you should be a fan of Ford stock?
That’s where Green Zone Power Ratings comes in…
Ford Stock and the Green Zone Power Ratings System
Ford Motor Co. (NYSE: F) rates 36 out of 100 on our system. That means we are “Bearish” on the stock and expect it to underperform the broader market over the next 12 months.
While the stock rates low on Size (0) due to its massive $53.6 billion market cap, it also gets hit on Quality (39).
A big reason for that is its 14.1% gross margin … which is below the 20% average gross margin of the consumer vehicles industry. The company also has single-digit net and operating margin.
The stock is prone to big price swings, hence its 27 out of 100 rating on Volatility.
After hitting a 52-week high at the beginning of July 2023, Ford stock fell more than 11% over the rest of the month.
Its Growth rating is “Neutral” with a one-year annual earnings-per-share growth rate of -111.1%.
Bottom line: While Ford is looking to capture Lightning in a bottle with its revamped EV efforts, its financials and stock performance is lacking.
Reopening the Lightning production line can pay off in the long run, but for now, this is a stock you want to avoid.
That’s all for now…
Matt Clark, CMSA®
Chief Research Analyst, Money & Markets