Can Ford Surge Higher?

With shares of Ford Motor (NYSE:F) trading around $16, is F an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Ford is a producer of cars and trucks. The company also engages in other businesses, such as financing vehicles. Ford operates in two sectors, automotive, and financial services. Through its sectors, Ford provides a wide range of vehicles, vehicle parts, and services to a multitude of consumers and companies worldwide. The company's products saw declining demand in the past several years as gasoline prices took a major toll on pockets. Ford is now revolutionizing its vehicles in order to compete on the world stage. Look for Ford to fuel a recovery in the American automobile industry and provide highly demanded vehicles, parts, and services.

Many had already placed their bets on Ford CEO Alan Mulally taking over for Microsoft's (NASDAQ:MSFT) retiring Steve Ballmer, but unfortunately for them, it doesn't look as if Mulally is packing his bags just yet — or maybe ever. Ford board member Edsel Ford II spoke to Bloomberg Television on Thursday, saying that Mulally will stick with the automaker until the end of 2014. Ford II, the great-grandson of founder Henry Ford, responded to various speculations, asserting, "Alan is staying through the end of 2014, and that's all I know."

T = Technicals on the Stock Chart Are Strong

Ford Motor stock has been coasting higher over the past several months. The stock is currently trading mid range for the year. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Ford Motor is trading between its rising key averages, which signal neutral price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Ford Motor options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Ford Motor options	26.62%	86%	84%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
December Options	Average	Average
January Options	Average	Average

As of today, there is an average demand from call and put buyers or sellers, all neutral over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Ford Motor’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Ford Motor look like and more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-69.00%	15.38%	14.29%	-88.17%
Revenue Growth (Y-O-Y)	11.84%	14.71%	10.37%	5.34%
Earnings Reaction	1.37%	2.53%	-0.22%	-4.64%

Ford Motor has seen mixed earnings and increasing revenue figures over the last four quarters. From these numbers, the markets have had conflicting feelings about Ford Motor’s recent earnings announcements.

P = Weak Relative Performance Versus Peers and Sector

How has Ford Motor stock done relative to its peers, General Motors (NYSE:GM), Toyota Motor (NYSE:TM), Tesla Motors (NASDAQ:TSLA), and sector?

	Ford Motor	General Motors	Toyota Motor	Tesla Motors	Sector
Year-to-Date Return	29.07%	35.69%	30.13%	319.40%	32.63%

Ford Motor has been a poor relative performer, year-to-date.

Conclusion

Ford is a well-established vehicle products and services producer distributed in a multitude of countries across the globe. Many had already placed their bets on Ford CEO Alan Mulally taking over for Microsoft's retiring Steve Ballmer, but unfortunately for them, it doesn't look as if Mulally is packing his bags just yet — or maybe ever. The stock has been rising higher in recent years and is now trading mid range for the year. Over the past four quarters, earnings have been mixed while revenues are increasing which has produced conflicting feelings among investors. Relative to its peers and sector, Ford has been a poor year-to-date performer. WAIT AND SEE what Ford Motor does this quarter.