Ford Motor Company (NYSE:F) has seen its stock price grow due to its significant investment in electric vehicles. Models such as the Mustang Mach-E electric SUV and the F-150 Lightning electric pickup truck have given the Detroit legacy automaker a lift.
In December, a strong performance helped Carlson Capital's Double Black Diamond fund achieve a double-digit return in 2021. Q4 2021 hedge fund letters, conferences and more Double-Digit Return According to a copy of the latest investor update, which ValueWalk has been able to review, Clint Carlson's Double Black Diamond fund returned 2.9% in December and Read More
As recounted by CNN, Ford CEO Jim Farley bought $1 million in Ford stock in May last year —150,000 shares for just over $5 each— when he was the company’s chief operating officer. The purchase is “surprising” as Ford executives have a good deal of stock and stock options as part of their compensation package.
Farley is now the car manufacturer’s CEO and the company stock price has grown four times, at the same time Ford has revealed the introduction of scintillating electric models such as the Mustang-E electric SUV and the F-150 Lightning.
The fact that Farley has not shed his stakes at the company reveals how much faith he has in Ford's success and long-term plans in the world of e-mobility.
“Farley isn't the only higher-up at the automaker who's placed a bet on the company recently. Ford chairman Bill Ford, great-grandson of founder Henry Ford, recently exercised 2 million stock options to acquire more shares,” CNN underlines.
“Ford paid $20.5 million, including taxes and fees associated with the move -- and rather than sell off options to cover the cost, he converted them all into Ford stock.”
Why The Value Increase?
The company’s heavy investing in vehicle electrification is seen as the main reason behind its stock success. The Mustang-E has been praised by the automotive world and has been met with consumer acceptance through solid sales.
Production of the model in Cuautitlán, Mexico, will triple according to the company, while interest in the F-150 pickup truck —due to start production in the spring of 2020— has also exceeded estimates.
Stephanie Brinley, an industry analyst with IHS Markit, said: “They're doing the things they need to do to be strong in that space. It's about putting electrification into the vehicles that work for consumers' lives.”
Doug Betts, an industry analyst with J.D. Power and Associates said, “I think that there were a lot of analysts and others in business who somehow had the idea that the Fords of the world somehow didn't know how to make electric vehicles.”
Ford is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.