re F (Ford) thanks for the link. I was not aware of a change in the pension assumption. From my point of view, it does not matter what actuary assumptions are made - the fact is that Ford has to pay ~5.5B$ in hard cash to their pension receivers and they have 58B$ in assets to cover it. it seems like a stretch to assume that this asset base can support the outlays. Right now they assume an 8% return on plan assets and based on that their pension fund is ~ 10B$ underfunded. Given the interest rates we have right now and a 45% allocation to bond funds according to their10K (note 18), i cannot see how they make it. If you assume 7% return, they would need ~78B$ to support the outflows, which would be a 20B$ shortfall.
In any case, i don't see F as an attractive stock, if you count in all liabilities, the EV/ EBITDA does not look that attractive to me, relative to better financed peers like BMW.DE (trading below tangible book), Daimler or Toyota.
Just look at these stats (they include the finance ops) and compare with F. BMW3.DE comes out ahead and as a luxury car maker, actually has a moat, much less of a pension problem , a much better balance sheet etc.
finance.yahoo.com
In most cases, it's better to avoid stocks with huge pension liabilities. Analyst like to ignore or downplay them, so they are often not acknowledged in earnings or FCF estimates. Managment tends to ignore them and speaks about operating earnings or such. Yahoo ignores them too. You have to do the legwork yourself. My last experience with XLS was not good either. It takes quite a hurdle for me to even look into this stuff, since I know that in 80-90% of all cases, I'll pass anyways. |
