Zack Tobin is a Financial Analyst  at I Know First. 

Ford Stock Prediction

• Self-Driving cars are the future for the automobile industry
• Ford is capitalizing on this by teaming up with google.
• Ford is investing $4.5 billion in electric cars
• I Know First algorithm forecast a strong bullish signal for Ford over the next year

Ford Motor Company manufactures and distributes automobiles worldwide. The company operates through two sectors, Automotive and Financial Services. The company is headquartered in Dearborn, Michigan. During the financial crisis of 2008, Ford nearly had to declare bankruptcy but has since returned to profitability.

If there is one on-going trend in the automobile industry, it’s that every company involved is trying to turn their product into self-driving electric cars.  Ford is no exception to this trend as they have recently invested $4.5 billion dollars in order to achieve their electrified goals by 2020. 2015 has been an up and down year for Ford, by starting the year at $15.36 per share, then falling for the next nine months to a year-low of $12.90 on August 25, before having a strong rally over the past four months, to where it currently stands at $13.80. Whether or not the stock will continue to rise depends on whether or not its investments will pay off.

Plan for Self-Driving Cars

While it is yet to be confirmed, it has been highly speculated that Ford will team up with Google to make the self-driving cars come out faster.  The alliance between the two companies makes sense as the former CEO of Ford, Alan Mullaly is now on Google’s board of directors.  Google has also met with ford and other big automakers because they have expertise in engineering and building cars. Ford has also announced that they have received permits from the state of California. This shows that Ford is doing what they can to put themselves in a good position as the auto industry begins to evolve.

Electric Cars

The first of 13 models that will come from $4.5 billion dollar investment will come out in 2016. It will be called the Focus Electric. The focus electric will have a smart feature called Brake Coach. Brake Coach shows the driver how to use smooth braking to maximize the energy captured through the regenerative braking system.  The EcoGuide LCD Instrument offers a multitude of customizable displays which enhances the efficiency of the vehicle.  By 2020, 40% of the company’s global nameplates will feature electric versions. As of now only 13% of Ford’s models are electric.

Forecast

I Know First, it is a FinTech Company that supplies financial services, mainly through stock forecasts via their predictive algorithm. The algorithm incorporates a 15-year database and utilizes it to predict the flow of money across 2000 markets. The self-learning algorithm uses artificial intelligence, predictive models based on artificial neural networks, and genetic algorithms to predict money movements within various markets.

On December 27th, 2015, I Know First published a bullish forecast on Ford. The one-year forecast for Ford is included.

Explanation about how to read the forecast is further elaborated here

I Know First has had success predicting the movement of Ford’s stock price in the past. In this three-month forecast from January 29th, 2015, Ford had a strong Bullish signal strength of 94.79 and a predictability indicator of 0.56. In accordance with the algorithm’s prediction, the stock price increased 10.79%% during that time.

Positive signal strength does not mean investors should automatically buy the stock. Dr. Roitman, who created the algorithm, created rules for entry for a stock such as Ford. Using this trading strategy, an investor should buy a stock if the last 5 signal strength’s average is positive and if the last closing price is above the 5-day moving average price. When both of these conditions are met, it is a good time to initiate a position in the stock.

Conclusion

Given the fact this has not been the best year for Ford, it would be understandable why some might want to sell Ford. However, for the reasons stated above the I Know First algorithm is bullish on the stock for the future. By investing more into electric cars; and by teaming up with Google, it is clear that Ford should head in the right direction.