Buy Ford at $14.60, Today
Sales remain robust, evident after the company beat monthly sales estimates for May and June. For July, Ford posted total vehicle sales of 193,715, an 11% increase, missing analyst estimates by about 3%.
Thought the stock would selloff on that news? Think again. It was also thought that after the run up into earnings, the stock would again, selloff a bit -- at least, by me. But that also wasn't the case.
For second-quarter earnings, the company crushed top-line estimates of $35.15 billion by nearly $3 billion and bottom-line estimates of 37 cents per share by 8 cents. That alone could fuel a rally, but then the company's management revealed its European losses were finally shrinking, ($348 million versus $404 million in the same quarter last year), something that has been plaguing the stock for multiple quarters.
After earnings, the stock gapped higher to $17.50, before selling off slightly, to the upper-$16 range. After the July sales numbers were reported in early August, the stock quickly ran higher and tested $17.50 once again. The bears have won that level so far, but that won't likely be the case for long.
The Detroit automaker continues to press higher and has presented only a few buying opportunities throughout the year, the last one coming when the stock sold off to its 50-day moving average, closing slightly above it, at $14.67.
Now, with some relative weakness in the broader market, shares of Ford made an intraday low of $15.82 on Aug. 20, after another mini-pullback. With its most recent close at $16.41 on Thursday, the stock is down roughly 6% from its monthly high. Now you're probably wondering, "How the heck do I buy shares at $14.60?"
The answer is by selling puts, which is often times an overlooked strategy. The thought of holding naked put options -- which is the term used when shorting single-leg call and put options -- is considered highly risky and only for the sophisticated investor.