Harley-Davidson: Easy Riding on Less Bad Results
July 20, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Short Ideas
Ockham Research submits:
Bucking the trend, Harley-Davidson, which uses that great ticker symbol, HOG, with a solid 8% gain thanks to a return to profitability in the finance arm. – Fox Business Network 7/20/2010
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The End of the ‘Second Wind’ for Harley Davidson?
June 14, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Short Ideas
Graham and Dodd Investor submits:
Harley Davidson (HOG) was formed in 1903 by William Harley, and Arthur Davidson, members of FDR’s "Rendezvous With Destiny" Generation, which was much like today’s Baby Boomers. This "pedigree" information is important, because it explains the company’s initial success and recent revival, and predicts a second downfall.
More "freewheeling" than the newly invented automobile, Harley Davidson motorcycles were also more affordable. More to the point, they gave members of the Boomlike "Rendezvous" generation, a sense of carefree exploration, together with a rugged individualism. At the time it was introduced, the members of the Rendezvous ranged in age from early 20s to early 40s, basically prime buying age for them.
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Risk Appetite Returns With a Vengeance, Led by Harley-Davidson
April 21, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Short Ideas
Stephen Castellano submits:
Higher-risk stocks, with poor but incrementally improving fundamentals, outperformed by almost 2x that of the market Tuesday. The S&P 500 returned 0.81% excluding dividends, but "low-quality" in our unlevered model portfolio rose 1.77% on average, driven by the likes of Harley-Davidson Inc. (HOG) up 7.32%, MGM Mirage (MGM) up 6.91%, and Weatherford International Ltd. (WFT) up 5.71%. If Apple Inc.’s (AAPL) blow-out earnings reported after the market close, along with IBM (IBM) and Johnson & Johnson (JNJ) earlier reports are any indication, maybe we could see another positive day today.
While HOG is still in our monthly "low-quality" model portfolio, it left our weekly "low-quality" list as of April 16 due to positively trending analyst revisions. Interestingly, we noted in that report that stocks leaving the "low-quality" list due to positive analyst revisions could outperform significantly. If these trends continue, perhaps other stocks in this category could benefit, including Sony Corp (SNE), Brookfield Asset Management (BAM), Host Hotels & Resorts Inc. (HST), OSI Pharmaceuticals (OSI) and InterMune Inc. (ITMN).
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Harley-Davidson Revs Up on Financial Services
April 20, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Short Ideas
Ockham Research submits:
By all accounts, Harley-Davidson (HOG) reported one of its best financial performances in quite some time on Tuesday morning, and in response shares rose more than 8% in heavy trading. Although sales slid by more than 19% from a year ago, they still came in slightly ahead of expectations at $1.04B. The company reported net income of $33.3 million or 14 cents in the quarter, but excluding one-time charges the results were considerably better. Harley earned about 29 cents per share ex-items, which was about 32% better than consensus analysts’ estimates. Perhaps most important was the fact that Harley Davidson Financial Services returned to profitability quicker than most had anticipated. HDFS reportedly made about $26.7 million in operating profit during the quarter accounting for roughly 11 cents per share, certainly not a small haul for the unit responsible for large losses in the previous three quarters.
The performance of the financial services division clearly outpaced expectations of just narrowing losses. The company added an impressive $1.9 billion in finance receivables, and delinquency rates improved as well. Improving credit trends are a welcome sign to HOG investors, but we also see some considerable reason for concern, primarily in their core business of selling motorcycles. Net shipments fell 28% from a year ago to less than
54k, but the firm did reiterate its forecast for full year shipments of 201k to 212k. We believe that forecast (for declines of between 5% and 10%) implies a rebound in sales activity through the rest of the year. While that is certainly a possibility, we are concerned that the American consumer is still reluctant to commit to this size of discretionary purchase on a wide scale.
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Harley-Davidson: Looking for a Good Short? Shed Some Fat
March 15, 2010 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Short Ideas
David White submits:
The market is overbought in the near term. The Fed is on the verge of removing massive amounts of liquidity ($1T). Some Fed governors are even talking about wanting to remove the assurance that Fed Funds rates will be held low for an extended period of time. A massive health care bill is on the verge of being approved. This will in all likelihood mean further expenses on health care; it at least symbolizes further entitlements. After the recent Greece fiasco, entitlements are anathema to the markets. They are Greece’s biggest problem. The market could turn down on this news, especially if the health care bill is approved.
If it does, you probably want to have a few stocks to short.
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Harley-Davidson: Opportunity Exists to the Downside
October 19, 2009 by Seeking Alpha
Filed under Investment Ideas
Original Article from Seeking Alpha Short Ideas
David White submits:
HOG missed earnings estimates earlier this week. It reported EPS of $.11 vs. an estimate of $.21. Thus far on Yahoo Finance, the analysts’ estimates for Q4 2009 have been lowered to -$.26 from -$.16. This means HOG now stands to earn $.43 in FY2009. This translates into a FY2009 P/E of 65 based on Friday’s closing price of $27.86. This P/E is far too high for a company whose earnings and revenues seem to be going in reverse instead of growing. Earnings were down more than 80% and sales were down 21% year over year (i.e. revenues are down).
HOG announced it was discontinuing two product lines — Buell and MV Agusta — in order to focus more strongly on the Harley-Davidson brand. We’ll have to see how good a strategy this turns out to be. Many people have expressed doubts that the Harley-Davidson brand will continue to have the same appeal as the baby boomer generation ages out of the motorcycle buying demographic. Those same people have suggested that both Buell and MV Agusta had more appeal to younger generations.
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Harley-Davidson in the Mire and Likely to Stay There
July 22, 2009 by
Filed under Tips
David White submits:
Last week, Harley-Davidson (HOG) reported earnings (see conference call transcript here). U.S. retail sales fell 35%. International sales fell just 18% as HOG was aggressively pursuing sales in Latin America, Europe, and China. This translated into a 91% decrease in profit year over year.
Harley-Davidson cuts 1,000 jobs
July 16, 2009 by
Filed under Daily Alerts
MILWAUKEE – HARLEY-DAVIDSON Inc. says it is cutting 1,000 more employees as its second-quarter profit tumbled 91 per cent on falling motorcycle shipments.
The company also says it is cutting its forecast for motorcycle shipments for the year.
Harley-Davidson Fights Back from Negative Analysis
June 10, 2009 by
Filed under Articles
Ockham Research submits:
Harley-Davidson, Inc. (HOG) has endured some very bitter comments from analysts in the past couple of trading sessions. On Friday it was a downgrade to “Sell” from a Citigroup (C) analyst that sent shares tumbling 7% on the day. On Tuesday a research note out of UBS (UBS) piled on the bad news, as they revised their earnings estimates downwards because second quarter sales results appear to be worse than anticipated. However, in contrast to the sell-off instigated by the Citi analyst, Tuesday the stock fell close to 10% in the morning and then battled back throughout the day to end nearly even for the trading session. The fact that HOG shares rebounded so strongly could be a signal that the bulls are taking control and the shares will be resilient to further weakness.
It is no surprise that this market environment is a very difficult one for the iconic Harley-Davidson brand. The company’s sales are slumping down 35% from last year in the second quarter, as referenced by the UBS analyst. The obvious problem is that no one needs to buy an expensive motorcycle, and there is no doubt that sales of luxury goods are going to struggle in a recessionary spending environment. Furthermore, the secondary market for Harleys has never been more active as cash strapped Harley owners look to unload their bikes for cash, and even worse for Harley, used bikes that have been repossessed from less than creditworthy borrowers. Which brings us to the anchor that has weighed down Harley more than any other, Harley Davidson Financial Services or HDFS. HDFS was greatly affected by the credit crisis as the secondary market for Harley loans vanished. At the same time, HDFS
was making loans to sub-prime borrowers in order to boost slumping sales as we detailed back in December of 2008 in Not So High on the HOG. That was a recipe for disaster as evidenced by the stock’s substantial decline.
Harley-Davidson Short Base in Decline
May 22, 2009 by
Filed under Tips
Jessica Johnson submits: