#equity report

NIFTY 50 10491.05 (38.75)↑(0.37%)

Indian market started the week on a tepid note, as Nifty continues with its corrective mode. The Nifty50 respects the 10,300 levels, as the index recouped half of the Intraday losses to settle at 10,378. On Tuesday, India's The benchmark Nifty50 pared its gains rapidly in the last hour of the trade. It ended negative losing 18 points or 0.17%. On Wednesday, The Nifty 50 snapped a three-day losing streak, but could not breach the 10,400 mark on a closing basis. The opening level for the index became the Intraday high for the day, as Nifty tested the sub-10,350 levels in Intraday trade before ending the day in the black. On Thursday, The Nifty 50 ended lower in a volatile too remained confined in a range trade ahead of February F&O expiry. On Friday, The Nifty 50 make a solid bullish candle on the daily chart. On the weekly charts, the index made a 'Dragonfly Doji', suggesting a trend reversal could be around the corner. The benchmark Index Nifty50 (spot) opened the week at 10488.90 made a high of 10499.10 low of 10302.75 and closed the week at 10491.05 Thus the Nifty closed the week with a gain of 38.75 points or 0.37%.

Formations

•The 20 days EMA are placed at 10555.77 •The 5 days EMA are placed at 10435.50

Weekly Pivot Levels for Nifty 50 Stocks

Weekly Top gainers stocks

Weekly Top losers stocks

Weekly FII’S Statistics*

Weekly DII’S Statistics*

MOST ACTIVE NIFTY CALLS & PUTS:

Weekly Recommendations*:-

* FII & DII trading activity on NSE, BSE, and MCX’SX in Capital Market Segment (in Rs. Crores) * Pre-Market Recommendations...

DISCLAIMER

NIFTY 50 10491.05 (38.75)↑(0.37%)

Indian market started the week on a tepid note, as Nifty continues with its corrective mode. The Nifty50 respects the 10,300 levels, as the index recouped half of the Intraday losses to settle at 10,378. On Tuesday, India's The benchmark Nifty50 pared its gains rapidly in the last hour of the trade. It ended negative losing 18 points or 0.17%. On Wednesday, The Nifty 50 snapped a three-day losing streak, but could not breach the 10,400 mark on a closing basis. The opening level for the index became the Intraday high for the day, as Nifty tested the sub-10,350 levels in Intraday trade before ending the day in the black. On Thursday, The Nifty 50 ended lower in a volatile too remained confined in a range trade ahead of February F&O expiry. On Friday, The Nifty 50 make a solid bullish candle on the daily chart. On the weekly charts, the index made a 'Dragonfly Doji', suggesting a trend reversal could be around the corner. The benchmark Index Nifty50 (spot) opened the week at 10488.90 made a high of 10499.10 low of 10302.75 and closed the week at 10491.05 Thus the Nifty closed the week with a gain of 38.75 points or 0.37%.

Formations

•The 20 days EMA are placed at 10555.77 •The 5 days EMA are placed at 10435.50

Weekly Pivot Levels for Nifty 50 Stocks

Weekly Top Gainers Stocks

Weekly Top Losers Stocks

Weekly FII’S Statistics*

Weekly DII’S Statistics*

MOST ACTIVE NIFTY CALLS & PUTS:

MOST ACTIVE BANK NIFTY CALLS & PUTS:

Weekly Recommendations*:-

 * FII & DII trading activity on NSE, BSE, and MCX’SX in Capital Market Segment (in Rs. Crores)

* Pre-Market Recommendations...

DISCLAIMER

Stock trading involves high risk and one can lose Substantial amount of money. The recommendations made herein do not constitute an offer to sell or solicitation to buy any of the Securities mentioned. No representations can be made that recommendations contained herein will be profitable or they will not result in losses. Readers using the information contained herein are solely responsible for their actions. The information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness. The above recommendations are based on technical analysis only. NOTE WE HAVE NO HOLDINGS IN ANY OF STOCKS RECOMMENDED ABOVE                                                                                                            

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Daily Equity Report by Money Maker Research

Sensex snapped six days of gains, amid weakness in their Asian and European peers, as investors booked profits at higher levels. On the flip side, metal and mining shares bucked the trend and shown across the board after the Cabinet today cleared an amendment in the new mining law. The Sensex shed 171 points to end at 24,623 and the Niftylost 46 points to end at 7,486. Oil explorers closed mixed…

William Clay Ford Jr. is the Executive Chairman of the Board of Directors. He has held numerous positions with Ford including Chief Executive Officer, prior to the company bringing in Alan Mullaly. As CEO, he improved quality and lowered costs, transitioning a company that lost $5.5 billion in 2001 to three years of profitability. He is committed to sustainability and green tech automobiles. As a member of the Ford family, he can trace his career with the company back to 1979 when he started as a product planning analyst. He is also a director for Ebay and is on the finance and sustainability committees.

Alan Mulally is the President and Chief Executive Officer and has been so since September 2006. Before coming to Ford, he was the Executive Vice President of Boeing Company and President and Chief Executive of Boeing Commercial Airplanes. Mulally has been recognized multiple times for his contributions and industry leadership by Fortune Magazine, TIME Magazine, Barrons Magazine and Business Week. He is a member of the finance committee.

Mark Fields is currently the Chief Operating Officer of Ford Motor Company. Fields has been in charge of the company’s “The Way Forward” plan that is intent on reducing fixed capital costs while maintaining a specialty focus on cars and car-based crossover vehicles. The hope is to make the product line more profitable and reducing costs for development and production, while introducing new products that connect with the consumers. Though Ford had to close plants and divest in numerous companies, it is safe to say that this plan has been a success as the company has reaching record sales. Fields was promoted to COO in 2012 and is reportedly a favorite to succeed Alan Mulally whose contract ends in 2014.

Robert Shanks is an Executive Vice President and the Chief Financial Officer of Ford Motor Company. Shanks previously served as a vice president and controller. He has a wealth of global experience in business strategy and corporate planning. In a previous role, he was responsible for driving financial methodology, processes, best practices, and synergies between Ford of Europe and Premier Automotive Group.

Ford Motor Company traces its roots back to 1903 when it was founded by Henry Ford. In 1908, Ford introduced the Model T, produced on an innovative moving assembly line that transformed both carmaking and manufacturing. By 1920, 60% of all vehicles on the road were Fords.

Ford bought Lincoln Motor Company in 1922 and discontinued the Model T in 1927. The Model A came in 1932. Mercury was introduced in 1938. During this period of time, Ford was losing market share to both General Motors and Chrysler. It wasn’t until 1950 that Ford recaptured second place. In 1958, Ford launched the Edsel line and in 1964, the company launched the iconic Mustang.

The 1980’s and 90’s featured more acquisitions. While the Ford Taurus and Mercury sable gave Ford a 22% market share, Ford was acquiring Aston Martin, Jaguar, and a First Capital (a financial services company). The company also diversified into agricultural equipment. In 1994 Ford acquired Hertz rental car and Budget two years later.

The 90’s also spurred great growth for the company through the manufacturing of Sports Utility Vehicles (SUVs). The Ford Explorer and Expeditions were both great hits. However, in the last 15 years, the company’s quality has been hurt, as the Ford has some major recalls due to fire danger and tire failure. This was a huge hit to the company’s reputation.

Ford has sold off many of the companies it acquired in the 80’s and 90’s. It sold Hertz to a private equity group. It sold off Land Rover and Jaguar to Tata Motors and Aston Martin to a British consortium. It also sold off Volvo and discontinued the Mercury brand. While there has been a lot of divestiture, Ford has invested strategically in countries like India and Mexico.

Former Boeing executive, Alan Mulally, was named the CEO of Ford in 2006. Ford was struggling in North America, though it remained tough abroad. Mulally successfully began a renaissance that began with carefully getting through labor and antitrust difficulties. Ford took loans from the Department of Energy to stay afloat and began a process of getting leaner and making better cars.

Ford is one of the largest players in the global automotive manufacturing industry with the largest share of its revenue coming from the United States. The global automotive manufacturing industry encompasses the companies producing passenger vehicles, pickup trucks, sports utility vehicles (SUVs), crossover vehicles, and vans.

Suppliers

Auto parts and accessories manufacturing

Automobile engine and parts manufacturing

Global iron and steel mills

Global tire manufacturing

Buyers

Car dealers

Summary

The combination of higher gas prices and the economic recession that resulted from the financial crisis had dire consequences for the automotive manufacturing industry. The higher gas prices have caused consumers to increase their demand for smaller cars and hybrid vehicles at the cost of SUVs and pickups. Some manufacturers have tried to incorporate more smaller vehicles into their portfolio, while others are waiting for gas prices to fall, and consumers to demand larger vehicles again.

The financial crisis and the resulting recession resulted in a 15.4% drop in industry revenue in 2009. Both Chrysler and General Motors had to receive bailouts from the US Government and Ford endured by taking on major loans. The recession resulted in a lot of pent up demand that should be reflected in growth in the next couple of years. With the growth abroad, specifically in the BRIC countries, industry revenue growth is expected to be 2.5% to $2.6 trillion in 2018.

 Key External Drivers

Global per capita income, specifically disposable income, is important to the automotive industry due to the fact that automobiles are expensive durable goods.

The price of crude oil will also affect automakers, specifically the makers of larger vehicles like SUVs and light trucks. When oil prices skyrocketed, there was a shift in the consumer demand towards smaller vehicles.

Much of the growth in the industry comes from worldwide economic growth, in particular emerging markets. The GDP growth of the BRIC nations is a key driver of growth.

From the supply side, the world price of steel is very important since steel is one of the primary materials used in cars. Fluctuations in the price of steel have a great effect on the margins of the automotive manufacturers.

Current Performance

The financial and housing crisis in the United States had a dramatic effect on the automotive industry. Car and light truck production fell 12.3% in 2009. There have been production constraints as a result of natural disasters like the earthquake in Japan and floods in Thailand. Countries like China, which had 32.4% growth in 2010, are still growing at rapid rates.

Additionally, there has been a shift from larger vehicles like trucks and SUVs to smaller, more efficient cars and hybrids. The Big Three (Ford, GM, and Chrysler), in particular, have been affected by this change. Both Chrysler and GM had to be bailed out, while Ford barely survived.

The BRIC countries continue to be the main source of growth. The decrease in price has allowed vehicles to accessible in low-income countries. At the same time, China has adopted cars as the primary transportation. The Chinese market has been a huge source of growth for demand. On the other side, India has made itself a low-cost production environment. Other countries, such as Mexico, Brazil, and Thailand, have been significant cogs in the supply chain.

The profitability of the industry has taken a hit in the last few years as companies have scrambled to reduce production and laid off employees. This, again, was due to the financial crisis, which significantly reduced the demand for cars. The industry should recover as the global economic situation improves.

Why Ford?

It’s a simple question and worth addressing before I get into the actual analysis of the company. It’s a pretty simple answer too; I love Ford. As a teenager, I was obsessed with cars. Moreover, I was obsessed with muscle cars. My favorite car, and the car that got me into that phase, was the Fastback Mustang. They were beautiful, agile, and sleek, yet still had that grunt under that hood that every car needs.

There are other reasons too. I am Ford shareholder. I feel that it’s important to disclose this. If you think that there is some bias in my report, then you should definitely call me out for it. Obviously, I have a strong opinion about the company, but I want to take the time to look deeper at the financials, the industry trends, the outlook, to try and get a better idea of where my holding stands. You’d expect that I already know everything about it, but I don’t.

Ford is an American car company. There was a lot of distress amongst the American automakers in the financial crisis. Much of this was a result of changing trends within the industry and these companies’ reliance on outdated, unrefined vehicles like SUVs. Ford has come out of that distress strongest, in my opinion, and I’d like to take a further look into that.

It is also important that Ford is a Michigan company, which is, of course, where I went to college. I actually think I know more families that are linked with General Motors, but both of those companies are important to the local economy in the Midwest.