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Strategies & Market Trends : Sharck Soup

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To: Sharck who started this subject	6/4/2001 11:16:50 AM
From: besttrader	of 37746

10:57 ET Ford (F) 24.72 +0.13: Speculation of a shake up in top management at this automaker is the buzz on the Street this morning after a Wall Street Journal report that the company's Board is weighing its options. The report follows Friday's news that Bridgestone/Firestone has asked federal regulators to investigate new data showing that Ford Explorer SUVs tend to oversteer as a result of a design flaw. In attempting to deflect the blame from itself, Firestone is taking the risk of exposing itself to massive liability. Should the National Highway Traffic Safety Administration (NHTSA) fail to find a design flaw in Explorers, Ford will effectively be able to deflect liability for the numerous lawsuits filed against the company to Firestone. Firestone contends that a driver should be able to retain control of his vehicle even after experiencing tire tread separation, but the Explorer's design flaws preclude that from occurring. This battle will rage on in the courtrooms, and while it does, Explorer sales will continue weak. The auto industry has been suffering from weak sales for quite some time now, and with Ford's woes making headlines, it is likely to suffer disproportionately. Conventional wisdom says the time to buy cyclicals is when they are out of favor. Ford and the auto stocks are certainly out of favor, Ford shares dropped about 15% in May alone and have lost about 50% of their value over the past 52 weeks. The 52-week low of December 2000 stands at 21.69. We would eye that as key support and use the current weakness as an opportunity to accumulate shares in the 22-24 range for investors valuing a nearly 5% dividend yield and one of the most venerable names in US history. -- Matt Gould, Briefing.com

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