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All Ford Needs Is A Minor Tune Up

Inside Wall Street


Money managers see turnarounds among the large-cap stocks, too. Ford Motor (F) is a "particularly attractive" value, says Edward Wachenheim of Greenhaven Associates in Purchase, N.Y.

Ford's earnings are being hurt by the slowing economy and the cost of launching several new products. But Wachenheim believes productivity gains, reduced costs, and better management will lead to strong growth at cash-rich Ford. At 30 1/2, the stock trades at a p-e of 6.5 based on 1996 earnings. Wachenheim thinks Ford will earn over $3.50 per share this year, and, if the economy stays on course, $4.50 to $5 in 1996.

Gail Bardin, co-manager of the $139 million Hotchkis & Wiley Equity Income Fund, also thinks Ford is a good value. She likes its sound balance sheet and geographic diversification. That and Ford's "dramatically reduced breakeven point" will smooth out cycles and help the company weather any future recession far better than it has handled past slowdowns, she says. Bardin thinks that the auto maker's stock could go to 45.

And the stock could get a boost if Ford spins off one of its financial subsidiaries, which Wachenheim says is possible. If The Associates, its consumer-finance arm, were spun off, he figures it could be worth $10 billion, or $8 per share.BY SUZANNE WOOLLEY

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