Reuters reported that Ford is expected to tell unions they are closing the Plant in Genk which employs 4,300 workers. The plant only makes a few Ford models and Ford is preparing to produce them elsewhere in an effort to cut European losses. In July the automaker doubled their European loss guidance to $1 billion and stated that they had to decrease production to mirror the slowing demand.
At first glance this seems like negative news, but GM is also struggling in Europe. Ford sales in the United States have been extremely strong and don't show any signs of slowing down. This plant closure in Genk should increase shareholder value and help Ford to continue performing well. Ford has been doing a remarkable job at paying back massive debt created during the financial crisis quickly as well as reinstating their dividend. Unlike General Motors Ford did not require a bailout. Ford's stock still remains extremely undervalued at a current P/E of only 2.27. Ford is scheduled to report earnings on 10/30. People aren't expecting anything out of their European sales results, but if U.S. sales continue to increase this stock could get a nice pop and continue to climb through years end.
Tuesday, October 23, 2012
Friday, October 12, 2012
Tech Plays In The Cloud
The trading session began today with the exciting IPO of Workday $WDAY. The company has been in business since 2006. They basically offer a form of cloud computing for businesses. The IPO price was $28 and the stock opened at $48.05! Is this too expensive? Another Facebook like IPO?
Workday has had year over year revenue growth of 100%, yes 100! The cloud is said to be the next big thing in technology by many experts. Companies Rackspace Hosting $RAX, Salesforce $CRM, and Oracle $ORCL are some of their competition. While the valuation for workday isn't unreasonable compared to Rackspace and Salesforce it is very expensive when compared to Oracle!
Rackspace Hosting $RAX is currently trading at $67.29 which accounts for a P/E ratio of about 62 based on next years earnings.
Salesforce $CRM is trading at $152.77 with a forward P/E of 76.75!
Oracle however is currently trading at a huge discount. It suffered a recent pullback after reporting earnings in-line with analyst estimates a few weeks ago. It's not really clear why the stock has fallen, but I believe it creates a great buying opportunity. Oracle $ORCL is currently trading at $30.98. There forward P/E ratio is just 10.65. This is a large company with very sound fundamentals trading at a massive discount to its peers in the industry. Oracle is also currently the only one of these paying a cash dividend.
Workday has had year over year revenue growth of 100%, yes 100! The cloud is said to be the next big thing in technology by many experts. Companies Rackspace Hosting $RAX, Salesforce $CRM, and Oracle $ORCL are some of their competition. While the valuation for workday isn't unreasonable compared to Rackspace and Salesforce it is very expensive when compared to Oracle!
Rackspace Hosting $RAX is currently trading at $67.29 which accounts for a P/E ratio of about 62 based on next years earnings.
Salesforce $CRM is trading at $152.77 with a forward P/E of 76.75!
Oracle however is currently trading at a huge discount. It suffered a recent pullback after reporting earnings in-line with analyst estimates a few weeks ago. It's not really clear why the stock has fallen, but I believe it creates a great buying opportunity. Oracle $ORCL is currently trading at $30.98. There forward P/E ratio is just 10.65. This is a large company with very sound fundamentals trading at a massive discount to its peers in the industry. Oracle is also currently the only one of these paying a cash dividend.
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