The Coronavirus has dealt a massive blow to the world economy. And the 3 companies that I discuss in today’s article are amongst the hardest hit: Ford Motor Company (F), General Electric (GE) and General Motors Company (GM). However, they are rolling back the playbook to war time standards to use excess capacity to make well-needed supplies in the war on Covid-19.

Yes, this is a stock investment article. And the main focus will be on why these shares are attractive, especially for long term investors who appreciate the sizeable dip in shares from all time highs. So let’s appreciate the vital things each is doing at this special time in our history and then discuss what the future may hold for share prices.

Ford Motor Company (F)

Perhaps best known, and respected, for not participating in last decade’s auto industry bailout, Ford (F) is one of the few companies in the country that has enough cash on hand to weather the COVID-19 storm. In addition to that good news, the firm has recently announced that it will join other US manufacturers in the production of much-needed PPE and test collection kits. The company has partnered with Thermo Fisher to help increase the nation’s production of the collection kits that are necessary for testing for the virus. Ford (F) is also making gowns out of on-hand airbag materials to help medical professionals working on the frontlines as we combat this virus. Ford has also announced that they will be working with GE to help produce ventilators, a key piece of medical equipment necessary for the successful treatment of the coronavirus.

Turning to the investment picture, 2020 has not been kind to shares with a 48% haircut to date. As you can imagine this recession has not been kind to car companies. However, when we emerge from the recession raw materials will be lower as will interest rates making cars attractive purchase once again. When that happens, companies like Ford (F) will rebound with gusto. That is why is forecasting a price target of $10, up from the current list of $4.77.

General Electric (GE) 

Obviously, they’ve seen some brighter days, but it’s not all bad news at GE right now. The firm is one of the nation’s patriotic manufacturers who is converting some of its capacity to produce essential medical equipment. Beginning on April 20th, the company will work with Ford to produce much-needed ventilators to help fill the gaps caused by the low number of ventilators that were stored in the national stockpile. The partnership aims to produce up to 50,000 ventilators in the first 100 days of production and then build up to 100,000 per month following that period.

Just like Ford, GE shares have taken it on the chin with a 42% beat down from the 52 week. High. However, Andrew Obin at Merrill Lynch has GE as a buy with a target of $16. With a current list price of $6.48, there’s a lot of upside potential for this All-American staple.

General Motors Company (GM)

GM is ramping up production of face masks in light of the increased need of the nation due to the coronavirus. The project has a production target of 50,000 masks initially before ramping up to 100,000 masks made each day. This is great news for hospital staff and other essential workers who have had to improvise due to the lack of adequate PPE.

The same rebound story for Ford exists here at GM as well. Meaning we all know the pain from the recession will not last forever. So to climb on board a quality growth and income stock like GM trading down 41% from the highs seems like a pretty good idea for long term investors. That is why Michael Ward from Benchmark is forecasting $47 for the stock, which reflects some serious upside from the current price near $21.

If you’re looking to support companies that are supporting the nation, these three are a great place to start!

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F shares rose $0.10 (+2.10%) in premarket trading Wednesday. Year-to-date, F has declined -47.84%, versus a -14.67% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...

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