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Ford Stock Price Falls: Is It The Apple Of Cars?

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If you're the sort of person who enjoys similes, you could spend a lot of time comparing today's car companies to Apple.

Like Apple, for example, General Motors came back from the brink of ruin to become a leader in the industry once more. Toyota followed the same path in the wake of 2010's high-profile recall fiasco and 2011's earthquake and tsunami that devastated Japan. 

You could also draw parallels between Apple and Tesla, thanks to the latter's innovative, beautiful, high-tech products. Heck, Tesla even pilfered Apple's ranks to sell its vehicles: George Blankenship, who designed Tesla's controversial showrooms, was also the driving force behind  Apple's monstrously successful chain of shops. And surely there are some linkages to be made between Tesla's polymath proprietor, Elon Musk, and Apple's famous co-founder Steve Jobs (though as we've discussed, Jobs himself would've been a lousy fit for the auto industry).

But at the moment, we're most intrigued by the similarities between Apple and Ford. Despite stellar sales and strong profits, the stock prices of both companies are tumbling.

Exhibit A: Apple [NASDAQ:AAPL]

Because Apple is bigger than Ford, its fall has been far harder and more visible. After peaking above $702 in September, the company's stock price has plummeted, finishing yesterday around $458.

In the grand scheme of things, that's still pretty good -- until 2004, Apple stock had never crossed the $10 mark. But for the past several years, analysts and investors alike have been charmed by Apple's super-hot product lineup and its accordingly super-hot balance sheets. Then in September, the luster wore off a bit. Apple released the somewhat underwhelming iPhone 5 and an operating system with several well-publicized problems (namely, Apple Maps). The iPad Mini that debuted at the same time began cannibalizing sales of its more profitable big brother, and for the first time ever, someone was giving Apple a run for its money in the smartphone market: Samsung.

All of which is to say that Apple is still a-okay, but no company or product stays at the top of the charts forever. (Remember IBM? Atari? Enron? Polariod? Blockbuster?) Apple was bound to slip sometime. Even though it's still flying high -- and some would say that it's due for another surge -- investors are disappointed to see that it's not the invincible company they once thought it to be.

Exhibit B: Ford [NYSE:F]

Ford's stumble is harder to explain.

True, Ford has hit a few rough spots over the past few years. It's still struggling to get back on top of the initial quality rankings due to problems with its Sync and MyFord Touch infotainment systems. The 2013 Fusion has already seen two recalls, and the 2013 Escape has been subjected to four. Ford is also facing considerable public scrutiny (and at least one lawsuit) over its fuel economy claims for the Fusion Hybrid and C-Max Hybrid. 

But of the Detroit automakers, Ford is the golden child, the one that managed to avoid the bankruptcy fate that befell its rivals at Chrysler and General Motors. In the wake of the Great Recession, it narrowed its focus with the widely lauded "One Ford" plan. And it's turned out some great-looking cars, including the 2012 Ford Focus and the aforementioned 2013 Escape and 2013 Fusion. Of all the automakers doing business in America, Ford continues to generate the most positive buzz.

So, why isn't its stock doing better?

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Comments (3)
  1. Please stay under valued so I can buy more Ford stock!I made so much when Ford went to junk status 10 years ago and went all in.I will do the same because ford is an evergreen share on the long term buy.The future is so bright for Ford with there Engine of the year ( 3 cylinder), fresh Hybrid fleet,The upcoming all aluminum F150 and it's Hydrogen program .Nobody is as well positioned for the future .This is how Wall Street damages our home grown company's and I taking advantage because Ford is beyond Blue Chip.

  2. Totally accurate in your conclusion, it´s interesting to see more common sense in a automotive blog than in a financial one. And I´m speaking about Apple, not Ford. That just last year was much lower with better results.

  3. Ford is about to move to be the predominate truck builder when it releases it's all Aluminum F150 match 6 cylinder eco boast.Which will give you strength with tremendous high mileage and will render all trucks second rate.It's 3 cylinder engine will motivate the worlds emerging market car's and the Fusion will carry the value sedan category for years to come.Then with there Hydrogen car's in the near future. Ford is stacked to conquer Toyotas , ,VW and Hyundai because there old fashioned technology is not keeping or like Honda your badly managed.Maybe Wall Street should do some research.

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