Insider Buying

Insider Buying Report: Ford Motor Company (F:US)

Ford Motor Company
(F:US)
12 months:
+124%
Activity:
Bullish
Pattern:
Large purchase from Chairman
News:
Good Q3 results
Ford Motor Company
(F:US)
12 months:
+124%
Activity:
Bullish
Pattern:
Large purchase from Chairman
News:
Good Q3 results
A Ford automobile in blue and black is parked on the rocks.

Top-level insiders tend to have a good understanding of how their companies are performing. If these insiders are buying stock, it’s often a sign that business performance is strong and that the outlook for the stock is attractive.

In this report, we are going to highlight a large purchase from a top-level insider at Ford Motor Company (F:US). Ford is one of the largest automotive companies in the world. Traditionally, Ford has manufactured vehicles with internal combustion engines. However, recently, it has been moving into the electric vehicle (EV) space. The company is listed on the New York Stock Exchange and currently has a market capitalization of $79 billion.

Ford Motor Co: Insider Buying

Our data shows that on December 10, Chairman William Clay Ford Jr. bought 412,500 Ford shares at a price of $20.62 per share. This trade cost the insider $8.5 million and increased his holding to 3.952 million shares.

The graph represents Ford Motor Company' price history, with significant buy and sell events highlighted.

Top-Level Insider

There are unlikely to be many people who know Ford better than William Clay Ford Jr. Ford Jr. joined the board of directors in 1988 and was elected as Chairman in January 1999. Under his leadership, Ford has taken aggressive steps to improve the efficiency and focus of its traditional automotive business. At the same time, it has accelerated its efforts to be the most trusted provider of smart vehicles and mobility services. Given his background, it’s fair to assume he has a good understanding of the company’s prospects.

What stands out about this trade from William Clay Ford Jr. is its size. Our data shows that it represents his largest purchase of Ford stock in more than a decade. The size of the trade suggests that he is very confident the stock is set to move higher.

Full-Year Guidance Raised

Ford’s recent Q3 results showed that the company is experiencing supply chain issues at present due to the ongoing semiconductor shortage. For the quarter, revenue amounted to $35.7 billion, versus $37.5 billion a year earlier.

However, Ford’s revenue, net income, adjusted earnings before interest and taxes, and cash flow from operations for Q3 were all sharply higher from Q2 due to significant increases in semiconductor availability, and management was confident that the company will see strong growth as supply chain issues continue to ease. According to President & CEO Jim Farley, the company remains “spring loaded” for growth in North America as semiconductor volumes increase, with a 50% sequential increase in orders – to more than 100,000 – for vehicles already on the market.

“This is the most exciting Ford lineup I’ve seen, but what matters is that customers love our new products and services – and we’re just getting started,” said Mr. Farley. “The trajectory of our business gives us huge confidence in Ford+, and we’re obsessively turning the plan’s promise into reality.”

It’s worth noting that Ford will have made a large profit from the recent Initial Public Offering (IPO) of EV manufacturer Rivian. Ford owned about 12% of Rivian before its IPO and this stake is now worth around $10 billion. Analysts at RBC believe Ford could sell down its stake to fuel business growth.

In light of all of the above, we see the insider buying here as a bullish indicator.

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