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Brand Face-Off: Ford Motor Company vs. Toyota Motor Corp (ADR)

Evaluating F and TM from technical and sentiment viewpoints

by 12/30/2013 11:57:17 AM
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Automakers Ford Motor Company (NYSE:F) and Toyota Motor Corp (ADR) (NYSE:TM) have racked up positive technical track records in 2013. Although the companies have suffered losses following their most recent quarterly earnings reports -- despite beating their respective consensus estimates -- both are poised to finish the year with solid gains. To be specific, F is up 18.8% year-to-date to perch at $15.38, despite shedding 14.6% since its third-quarter announcement, before the open on Oct. 24. Likewise, TM has dropped 6.4% to trade at $122.02 since posting second-quarter results ahead of the opening bell on Nov. 6, yet the equity maintains a year-to-date gain of 30.8%. With 2014 just around the corner, let's see how Wall Street is lining up on the two automotive giants.

Daily Chart of F since January 2013

Daily Chart of TM since January 2013

First up, brokerage firms have dished out ratings across the board on Ford. From the 16 covering analysts, the stock has received six "strong buys," two "buys," seven "holds," and one "strong sell." Toyota, on the other hand, has hardly been noticed by the brokerage crew, as just one analyst has weighed in on the equity with a "hold" suggestion. Should F and TM continue on their recent downward trajectories, both equities may receive downgrades and/or bearish rating initiations, which could pressure the shares further south.

In the options pits, Ford has been on the bearish radar during the past two weeks, while Toyota Motor has been targeted by bulls. Particularly, F's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.47 is higher than 90% of similar readings from the last year, demonstrating puts have been bought to open, relative to calls, at a near-annual-high pace of late.

Meanwhile, TM sports a 10-day ISE/CBOE/PHLX call/put volume ratio of 2.28, with calls bought to open more than doubling puts. This ratio ranks in the 67th annual percentile, showing an accelerated demand for calls over puts in recent sessions. An unwinding of these bullish bets could serve as contrarian headwinds for TM.

Looking forward, both Ford Motor Company (NYSE:F) and Toyota Motor Corp (ADR) (NYSE:TM) could still face some challenges, from a contrarian perspective, as they try to steady their footing as a new calendar year begins.


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