What are some of the downside risks of buying Ford stock right now?

Ford was recently at a high of 14.44 but now because of the crisis in Greece is down in the 11 range again. Is there much risk for Ford to go much lower? What are those risks? What would cause Ford to go lower? How could the Greek crisis continue to have a negative impact on Ford?|||That's a very good question and I am wondering about this myself. I own several hundred shares of Ford (symbol F---quote http://finance.yahoo.com/q?s=f ) and I own several options to purchase Ford stock at $9.00 and $11.00 over the next few years. To say that I am concerned is an understatement.





To review, Ford just posted a $2.1B profit in the 2010t quarter, with sales and earnings growth in all markets including North America, Europe, Asia and South America. Additionally, Ford Credit had a profit of $828M, as opposed to a $36M loss in Q1 2009. The company is solidly profitable but still has certain headwinds and crosscurrents to deal with.





The company has $31.3B in debt, of which $3B was just paid on their revolving line of credit. Ford has sold a lot of bonds, whose value has risen over 100% in the last year. However, their bonds are mostly rated as grade B which is considered "junk" status. Until Ford can reduce it's debt, which it is working on, their bonds will be continued to be rated as "junk."





However, the fortunes at Ford are looking up. They have sold 590,439 cars and trucks YTD in 2010, which is 34% more than the 440,045 sold in 2009. Ford's flagship F-Series truck line has sold 143,985 trucks YTD 2010, making it the highest selling vehicle in the U.S and is up 42.4% from 2009. This bodes well for Ford's profitability as truck sales add $4K for each sale to the company bottom line (source: CNBC.com) and Ford is increasing truck production in the second quarter of this year and plans in building 625,000 cars and trucks in the 2nd quarter of 2010. See the link to the Detroit News article below.





Ford has also benefitted from public perception that the company did not seek government money for bailouts as did GM and Chrysler, and Ford did not take the easy way out and file bankruptcy to restructure and get rid of it's debt. On the other side of the coin, Ford's $31.3B debt is the biggest issue hanging over the stock share price at the moment. More on that later.





Ford is introducing the new 2011 Ford Fiesta in the U.S. which is a car that is inexpensive but with a lot of features that will compete directly against the Honda Civic and the Toyota Corolla (link to USA Today review is below).





Ford also has partnered with Microsoft to include "SYNC"庐 which, according to Ford's website is: "SYNC is an easy-to-use in-car connectivity system, standard on all 2010 Lincoln models and available on select 2010 Ford and Mercury models. SYNC allows you to operate most popular MP3 players, Bluetooth庐-enabled phones and USB drives with simple voice commands."





Now, to answer your question about Ford's stock price, the crisis in Greece has created volatility in the world's financial markets. Ford has a growing presence in Europe, but I don't think that Greece in itself will hurt Ford's stock price. The Greece sovereign debt issue will plague stock markets throughout the world unless a solution is drawn up by the European Finance Ministers as they are meeting in Brussels this weekend (May 7-9, 2010) and hopefully will come up with a solution that will re-structure Greece's debt. If not, the contagion will spread to Portugal and Spain, and may continue across Europe. This will create more volatility in the world's financial markets and we may see more selling on Monday May 10. IF this happens, Ford's share price may be on it's way back down to $10.00.





In summary---Ford is now profitable, but still has $31.3B worth of debt. Ford has a great mix of cars and light trucks, and is second in U.S. auto sales behind GM and ahead of Toyota in the U.S. YTD 2010. There is strong demand for their F-Series trucks, which is Ford's most profitable vehicles. Ford is introducing the subcompact Fiesta as a 2011 model which will be available mid-summer in the U.S. to compete with the smaller cars from Toyota and Honda. Ford has created excitement with it's newer vehicles including those mentioned above and also include the Ford Fusion, the newly redesigned Ford Taurus and the Ford Escape. A newly remodeled Ford Explorer will be introduced as a 2011 model.





Ford has public sentiment behind it because they did not accept government bailout money nor did they file bankruptcy. Ford's quality is now on the rise, and according to some reports, is the best in the industry.





Ford has a lot of momentum going for it and this is not a three, six or 12 month run. I believe that Ford has a 2-3 year horizon for it's share price to peak, and could reach $20.00 by 2012. Will Ford ever reach $50.00 again, like in 1999? Perhaps. Let's get to $20.00 first.





However, there are a lot of headwinds right now including the Greece issue which is causing uncertainty in the financial markets.





Alan Mullaly, the CEO,has done a great job bringing Ford back to respectability and profitability. Good luck.|||Buy GGP. You could realistically double your money within a year. Mark this post.