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From the assembly line to the bottom line, the iconic F-150 pickup pretty much is Ford

The sales

If you lump the F-150 in with Ford's two bigger F-series models (the 250 and the 350), it isn't just the top-selling pickup in North America, it's the top-selling vehicle period. In the United States, it has been Number 1 for 33 years straight. Why?

Pickup owners are more loyal to their brand than car buyers. They're also more loyal to Detroit's Big Three: GM's Chevy Silverado and Chrysler's Ram finished second and third last year, ahead of cars made by Toyota and Honda.

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The fat profit

The gross profit on each pickup is about $8,000. If Ford can continue selling more than 700,000 trucks a year, that's a $5.6-billion cushion.

The gamble Ford spent $3-billion, and secured 100 patents, to switch its pickup bodies to aluminum in 2015. GM and Chrysler are still weighing their options. Aluminum reduces the F-150's weight by 15 per cent and improves fuel efficiency by 20 per cent. But will that be a big selling feature if oil prices keep declining?

The bottlenecks Ford actually sold 25,000 fewer F-150s in its second quarter ended June 30 than it did in the same period a year ago. But the average sale price climbed $3,600 to a record $44,100, as buyers loaded up on fancy interiors and electronics. Factories were still ramping up production of the aluminum pickups and demand remains strong.

The share price

Despite a 44 per cent surge in Ford's second-quarter earnings and the continuing strength of the F-150, its share price drifted down this past summer. The stock has traded at a modest eight times forward earnings lately. Worries about sales in China and Europe persist, and analysts are roughly evenly divided between buy and sell.

The bottom line

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Given the modest valuation, and the rock-solid demand for the F-150, Ford seems more likely to surprise on the upside rather than the downside.

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