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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.

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

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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