Thus far, he gets an A+ for clearly articulating his plan, then having the backbone and negotiating skills to implement the necessary changes. The $million dollar question, "How do I play this?" Ford unlike its' competitors, still has a mountain of debt it needs to service (GM and Chrysler were able to unload much of their debt within the confines of bankruptcy protection). Ford has continued opportunistically buying back its own debt at deep discounts. To further bring down their expenses they will need to continue along this line. The concern is they may once again tap the markets with another share offering raising a few $billion dollars to again, pay down debt. Good news. Not so good news for existing shareholders as it would be highly dilutive.
I like the Ford Corporate Backed Trust Securities 8%, symbol XVF. These shares IPO'd back in 2003 at $25.00. They trade at a significant discount to par. At current levels they yield close to 14 1/2%. So, while the overall picture improves for the company, these shares should allow for investors to potentially capture significant capital appreciation as it gravitates back towards par, all the while paying out a hefty $2.00 share annually.
In a note of full disclosure, I currently own XVF. Due your own due diligence before making any investment decisions.
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home