Snarky Notes From All Over, Part 1 -- February 5, 2020

Updates

February 10, 2020: Ford -- little room for error. Bloomberg.  

Joe Hinrichs, Ford’s 53-year-old automotive president, will leave on March 1 after almost two decades with the company. As a rising star under celebrated former CEO Alan Mulally, he was put on the fast track to be a potential heir to the top job.

With Hinrichs out of the picture, Ford is elevating Jim Farley, the company’s only other president, to become the first chief operating officer since the automaker planned for Mulally’s succession seven years ago.

The announcement that the board will revive the role of COO came days after Hackett reported dismal earnings results, dogged by the disastrous rollout of the redesigned Explorer SUV, and forecast more disappointing numbers for the upcoming year.

"This signals to everyone that Farley is Hackett’s successor, unless they plan to go outside the company,” said David Whiston, an analyst with Morningstar in Chicago. “Perhaps it could be nine months from now, or it could be 18 months from now, but they will make an announcement that Hackett is retiring and Farley takes over as CEO.”

Farley joined Ford from Toyota Motor Corp. in 2007, just before the bottom fell out of the U.S. auto market. He helped navigate the company through the Great Recession without resorting to the government bailouts and bankruptcies that befell General Motors and Chrysler.

Original Post 

Wow, I'm in a great mood. My only dilemma: another cup of coffee here at McDonald's or head home and have coffee there. A senior coffee refill at McDonald's is free.

• Starbucks, tall coffee: $2.25
• McDonald's, senior coffee: 69 cents
• Starbucks, refill: 50 cents
• McDonald's, senior coffee refill: free

Choices, choices, choices.

I guess I missed a great SOTU speech, but then I never watch them. I often watch the arrival of the audience and the president; love to see the fake smiles, the theater, the pomp and circumstance. Did Ruth make the speech? It sounds like Trump hit this one out of the ballpark. For a chaotic, disorganized White House, he is quite incredible. It makes me wonder, makes me ask, often, just what in the world did past presidents do with all their free time? LOL.

What's the market doing? Well, first, what's oil doing?

• WTI: up almost 4%; who wudda guessed? Up $1.84; now trading at $51.45
• OPEC basket slips 1.53%; down 85 cents; trading at $54.66, well below what Saudi Arabia  needs if it wants to survive
• Brent crude: up almost 4%; up almost $2; trading at $55.92
• oilprice has it right for once: "rising crude inventories fail to halt oil rally"; did oilprice note that US crude supplies are actually below their five-year average and John Hess says he can see the beginning of the end for US shale?
• "beginning of the end for US shale"? We should see oil spike to $100 by the end of the day (see disclaimer)
• Now the market:
• Dow: up 307 points, and that's on top of a 450-point jump yesterday
• I don't even want to look at individual stocks; it no longer makes sense
• the "market" must have liked the SOTU speech
• apparently Trump's approval ratings are in record territory; but I digress
• AAPL: up $2.27; now trading at $321; still below it 52-week high
• BRK-B: up $2.47; trading at $227.52, about $4 below its 52-week high
• oh, let's do some dividend stocks:
• MDU: up 4.4%; up $1.34; yup, a new 52-week high
• D: up a bit; flirting with 52-week highs;
• BKH: up a bit; flirting with 52-week highs;
• T: up a bit; pays 5.63%
• and some stocks in the news:
• F: down 10% (more on this later, perhaps)
• TSLA: down 12%; down $108; 
• some pipelines:
• ENB: up 1.33%; pays almost 6%; what's not to like?
• OKE: up about 1.73%; pays 5%; what's not to like?
• some one-offs
• XLNX: up 2%
• EW: up almost 2%; up $4.12
• IMUX: at $9.13, down four cents; 52-week high: $46.80
• PFE: up 2%; pays 4%
• Wow, there was a two-three day opportunity to buy into this market; now we're back into fantasy land. LOL. 

Now back to Ford. What does Ford have that Tesla does not have. A huge, huge pension overhang. Link here.

• Ford Motor Co.'s profit last year plunged by more than $3.6 billion, weighed down by slowing U.S. sales, the cost of a botched SUV launch and some big pension expenses. 
• Ford: made $47 million in 2019 (Mike Bloomberg makes that in dividends each month); down from $3.68 billion in profit last year
• EPS: for the quarter, a loss of 42 cents, weighed down by $2.2 billion in one-time pension costs (these costs are always one-time costs; we see them once a year, it seems)
• analysts' forecast: a profit of 17 cents; instead, a loss of 42 cents; how can they get it so wrong; I guess they forgot about the one-time pension costs;
• botched SUV launch? the article did not mention it
• let's see if anyone does

here it is, The Chicago Tribune:

Ford CEO Jim Hackett said on a conference call with analysts that the company fell short of its expectations for the year, and he blamed the drop primarily on the flubbed launch of the new Ford Explorer SUV at its factory in Chicago.

New Explorers came off the assembly line with multiple problems and had to be shipped to a Detroit-area factory for repairs.

Hackett also referred to higher warranty costs during the year, especially for a flawed six-speed automatic transmission in the Ford Focus compact car.

I turned bearish on Ford when the company bought a scooter company, Spin; and, when it went all in on EVs, including an EV Mustang SUV. Are you kidding me?

What else does Tesla have that Ford doesn't have? Batteries. And Elon Musk, the greatest showman the world has ever seen.

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