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Ford: Selling Like Hotcakes

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Despite a 43% drop in sales in 2009, Ford didn't take TARP money. Now, the company's business is booming, and its stock may see some serious upside within the next six months.

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They cost between $24,000 and $53,000 each, and they are selling like hotcakes. One sold every 38 seconds during the month of August. No, not Washington lobbyists; I'm talking about F-series trucks.

Yep, the era of great American automobiles is back-and it's being led by the greatest of the American car companies, Ford Motor Co. (NYSE:F).

Of all the carmakers, Ford has posted the biggest gain in sales this year, up nearly 13% over 2012. Total car sales are up 8.5%.

This isn't an underdog story about overcoming long odds to find success. No, this is an American story of hard work and innovation. This story could also be worth a quick 42% profit for you over the next few months.

Ford never took any Troubled Asset Relief Program (TARP) money during the financial crisis, even though car sales fell 43% in 2009. It didn't declare bankruptcy either, despite losing $14.6 billion in 2008 and burning through $3.7 billion in the first quarter of 2009.

In part, that's because CEO Alan Mulally raised cash in 2006 when times were good. It was enough to get Ford through, but it didn't make the company successful today.

What sustained Ford was, well, sustainability. Former CEO Bill Ford believed that Ford's cars needed to become more fuel-efficient. He also made his manufacturing processes more environmentally friendly. And he saved money doing it.

Now that gasoline has gotten much more expensive, Bill Ford's demand that his cars become more fuel-efficient is paying off.

So was his decision not to cut research and development for engineering and new technology, like electric plug-ins and hybrids in 2008 and 2009. It's easy to see the result in the mid-size Ford Fusion. US News and World Report calls the Fusion the "Best Car for the Money."

Fusion sales are up 13.4% this year. In some cases, Fusions are selling in 20 days-three times faster than the industry. Ford will sell 300,000 Fusions this year...and it might even wrest away the Number One spot from the top-selling Camry.

Ford was ahead of the curve when it came to improving gas efficiency, and it's ahead of the curve when it comes to the next technologies.

Ford delivered its best August electrified vehicle sales ever with 8,292 sales, up 288% over August 2012. For comparison's sake, Tesla (NASDAQ:TSLA) sold 6,500 cars in 2012.

Ford's plug-in hybrids, Fusion Energi and C-MAX Energi, delivered their best sales month, year-to-date, with 600 and 621 units sold, respectively.

Ford C-MAX Hybrid sales jumped 12% in August over the previous month, with 3,032 units sold. Nearly two-thirds of the hybrid sales came from conquest buyers, people who traded-in other car brands. Highest on the trade-in list? Toyota (NYSE:TM) Prius and Honda (NYSE:HMC) CR-V.

So far this year, Ford's stock has increased more than 25%, and the stock is still extremely cheap. It trades with a forward P/E of just ten. It has made $8 billion in operating profits for four straight years.

It recently raised 2013 estimates, and I think Ford will raise its 2.4% dividend in October. But there's another catalyst poised to push Ford shares higher...Europe.

Ford lost $1.7 billion in Europe last year, and it thought it would lose $2 billion to the eurozone recession this year.

But Ford is gaining market share there-and has already cut its 2013 loss estimates by 10% to $1.8 billion. (I expect the loss will be even less than that.) Those savings go right to the bottom line.

Right now, I think you should own Ford stock. It has one of the best combinations of value, safety, and upside of any stock on the market.

In fact, I think the stock has a real good shot at hitting $25 over the next six months. You can enjoy some excellent profits, as well as cheer for a great American company.

Editor's Note: This Wealth Daily article by Briton Ryle was originally syndicated by MoneyShow.

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