by Hilary Kramer | February 17, 2012 6:15 am
Ford (NYSE:F) underwent some management changes following the retirement of two senior executives, prompting rumors that CEO Alan Mulally may be on his way out as well. CFO Lewis Booth, who played a key role in steering the company through the financial crisis, will be replaced by Vice President and Controller Bob Shanks, who has been with Ford since 1977. Derrick Kuzak, group vice president of global product development, will be succeeded by Raj Nair, the current vice president of engineering and global product development.
Both retirements and successions go into effect Apr. 1, and I expect a seamless transition.
More important, Mulally denied speculation that he might retire by the end of the year, explaining the company tries to have a strong succession plan in place for every position — including his — just in case. Mulally has built a multiyear vision for Ford that includes higher foreign sales, lower breakeven points and more fuel-efficient cars. I would not be at all surprised if he stayed on a few more years to see that vision through. F stock remains a buy in my book.
GeoEye (NADAQ:GEOY) announced it has successfully completed the final critical design review in its EnhancedView Program, which includes the development of the GeoEye-2 satellite and upgraded ground system architecture. This clears the way for next year’s launch of the GeoEye-2 satellite that is expected to drive additional revenues for the company.
Shares continue to lag due to uncertainty over potential defense budget cuts, which we should get more clarity on when the company reports earnings on Mar. 13. In the meantime, GEOY remains a cheap buy at 4.79 trailing enterprise value/earnings, and it is still a takeover candidate.
Johnson Controls (NYSE:JCI) CEO Steve Roell said during the Greater Milwaukee Committee’s annual meeting on Monday that the company may need to move beyond its current core business areas to continue to achieve double-digit revenue growth. One potential area he mentioned was to leverage the company’s expertise on car batteries to make batteries that operate the smart grid.
JCI is not a small company — with annual sales of $44 billion — so Mr. Roell’s comments were not a big surprise. While new markets are certainly a possibility down the road, the stock doesn’t need the new ventures to keep rising.
As I said in the “3 top Game-Changing Buys for February”, many investors are concerned with the company’s inconsistent profit margins, and management is taking action to boost these. That alone could have a bigger impact on stock performance. For now, shares are attractively valued at less than 12X earnings estimates for the current fiscal year.
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