The Market Appears to be Overlooking the Chip Shortage for Ford Motors (F)

8 Oct 2021 _ 9:30 AM EDT 

Overnight, Ford Motor (F) announced it will temporarily suspend production from Oct. 11-12 at its Hermosillo plant in Mexico, which produces its higher-margin Bronco Sport SUV because of material shortages. However, the market didn't appear to be punishing F on this news, as shares remain at the highs since yesterday's trading session. Remember throughout the course of the summer, every time Ford announced factory suspension due to chip shortage, market would punish Ford's stock. That happened again and again and again, time after time after time, even though we all anticipated that the chip shortage would be the worst this summer. Such continued punishments on anticipated, non-surprising news were frustrating, however served as buying opportunities for us throughout the summer. Lately, Ford has caught some bid, broken out of the downtrend and showing some momentum. This time, after another shutdown news, Ford shares remain resilient, indicating the market is overlooking the chip shortage for this year and starting to evaluate next year's prospects. This is certainly promising, however Ford investors should not be complacent. Market suggests it is willing to overlook the chip shortage for Ford right now. However we have the view that the chip shortage remains uneased, as a result, later on if market sees that the chip shortage continues to be a headwind, they will come back to punish Ford.