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Analysts: Ford is still safer investment


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Analysts: Ford is still safer investment

By BRENT SNAVELY

Free Press Business Writer

Even as shares of Ford's stock dropped 3.3% today in the wake of General Motors' highly publicized stock offering, experts said the Dearborn automaker is the safer investment.

"Ford has proven itself at this point while GM still has a little ways to go," said Ronald Humenny, founder and president of Starfire Investment Advisors in Southfield.

Ford's stock closed today at $16.12 per share, down 56 cents, or 3.3%. Many had expected Ford shares to slide as GM began trading again for the first time in 17 months.

"Before the IPO, Ford was the only game in town if you wanted to invest in the American car industry," said Efraim Levy, equity analyst for Standard & Poor's. "Now you have options."

In its first day of trading, shares GM's stock closed at $34.19, up $1.19 from the initial $33 offering price.

Unlike GM, Ford didn’t tap federal funds, and gained favor with the public as GM went through bankruptcy. But GM’s stock offering helps the U.S. government recoup up to $13.5 billion of its nearly $50 billion investment.

“Ford took a different path, we arrived at the same location — we’re viable companies,” GM CEO Dan Akerson said today. “At this stage of the game, the best car wins.”

Wall Street analyst Joseph Amaturo today downgraded his recommendation on Ford stock from a "buy" rating to a "neutral" rating. However, he said the downgrade was only in response to Ford's recent stock price increases.

Ford's stock price has soared 58.5% since the beginning of the year as the company's profits have increased. Ford earned a profit of $6.4 billion the first nine months of this year.

"The stock price has appreciated close to our price target," Amaturo said in his report. "We continue to believe Ford is the best positioned domestic manufacturer with the best product cycle as well as a superior balance sheet."

Veteran Wall Street auto analyst MaryAnn Keller also said earlier this week that Ford is viewed as a company that has successfully completed its restructuring while GM still must fix its European operations.

For that reason, Keller said, Ford will be looked at as a solid long-term investment. GM, she said, is a larger company with a stronger balance sheet but must still prove that its management team is stable and that it can successfully restructure its European operations.

Read more: Analysts: Ford is still safer investment | freep.com | Detroit Free Press http://www.freep.com/article/20101118/BUSINESS0102/101118072/Analysts-Ford-is-still-safer-investment#ixzz15gUkjgme

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