‘They Have Failed to Deliver’

We recently published a list of Jim Cramer is Talking About These 10 Stocks Amid Global Selloff. Since Ford Motor Co (NYSE:F) ranks 10th on the list, it deserves a deeper look.

Jim Cramer in his latest program on CNBC talked about the brutal market selloff of Monday and said days like these could make you “cry yourself to sleep.” Cramer said that this “nasty” selloff was expected.

“It’s exactly what you’d expect at this point in the rate cycle, the point where the Fed is about to start cutting rates to bolster the economy. But the economy is going down,” Cramer said.

Cramer said that the Monday selloff was “vicious enough” to make any investor think why they should stay in the market, but that’s exactly “what you have to do.” He thinks the latest decline is a buying opportunity for long-term investors.

Jim Cramer said that the selloff started because money managers who were borrowing money from Japan to invest in US stocks were caught with their “pants down” when Japan increased interest rates. As a result, these funds were forced to sell their stocks. He thinks it’s not possible to call a bottom on this decline yet “until we know these sellers are done unwinding their trades.”

Cramer said that another key reason why investors were selling on Monday was the notion that the Fed is late on cutting rates. But Cramer said a 25 bps rate cut wouldn’t have mattered a lot and if Fed Chair Jerome Powell sees there is a need for an urgent rate cut, he’d do it.

“He’s got horse sense,” Cramer said.

Jim Cramer said there are no “safe havens” in tech and while he reiterated his bullish view on some notable tech stocks, he advised investors to be ready for “pain” in the near term if they want to invest in technology.

“If you can’t take the pain, then get the heck out of it.”

For this article we watched several latest programs of Jim Cramer and picked 10 important stocks he’s talking about. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Is Jim Cramer is Talking About Ford Motor Co (NYSE:F) Amid Global Selloff?

Is Jim Cramer is Talking About Ford Motor Co (NYSE:F) Amid Global Selloff?

Ford Motor Co (NYSE:F)

Number of Hedge Fund Investors: 41

When asked about Ford Motor Co (NYSE:F) in a latest program, Cramer said that he’s got his own “reservations” about Ford Motor Co (NYSE:F) and decided to sell the stock for his charitable trust.

“They have failed to deliver what I expected them to do,” Cramer said.

Ford Motor Co (NYSE:F) is getting crushed after posting second-quarter results. Ford fell short on profitability and free cash flow amid increased warranty costs and higher manufacturing expenses. Ford Motor Co (NYSE:F) also missed its EBIT estimates by around 25%.

Ford Motor Co (NYSE:F) problems aren’t expected to be resolved anytime soon amid the broader slowdown in the auto industry and the company-specific issues. While Ford increased its free cash flow guidance, it was mainly due to cost savings rather than strong sales expectations.

To resolve the problem of mounting warranty costs, Ford Motor Co (NYSE:F) is increasing quality control and also delaying the launch of updated models like the Bronco, Explorer, and Maverick for further inspections. This may result in negative competitive pressure as rivals Stellantis (STLA) and General Motors (GM) launch new models.

Capital expenditure is expected to stay near the lower end of the guidance range, potentially leading to a future CAPEX surge.

Overall, Ford Motor Co (NYSE:F) ranks 10th on Insider Monkey’s list titled Jim Cramer is Talking About These 10 Stocks Amid Global Selloff. While we acknowledge the potential of Ford Motor Co (NYSE:F), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than F but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

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