HOG

Harley-Davidson Inc

Consumer, Industrial/Transportation


Presented:05/06/2020
Price:$19.56
Cap:$3.00B
Current Price:$35.24
Cap:$4.64B

Presented

Date05/06/2020
Price$19.56
Market Cap$3.00B
Ent Value$9.31B
P/E Ratio8.45x
Book Value$11.83
Div Yield7.69%
Shares O/S153.14M
Ave Daily Vol3,367,899
Short Int13.89%

Current

Price$35.24
Market Cap$4.64B
Harley-Davidson, Inc. is engaged in the manufacture and sale of custom, cruiser and touring motorcycles. It operates through the following segments: Motorcycles & Related Products; and Financial Services. The Motorcycles & Related Products segment manufactures, designs, and sells at wholesale on-road Harley-Davidson motorcycles as well as motorcycle parts, accessories, general merchandise, and related services. The Financial Services segment comprises of financing and servicing wholesale inventory receivables and retail consumer loans, primarily for the purchase of Harley-Davidson motorcycles. The company was founded by William Sylvester Harley, Arthur Davidson, Walter C. Davidson, Sr. and William A. Davidson in 1903 and is headquartered in Milwaukee, WI.

Publicly traded companies mentioned herein: Harley-Davidson Inc (HOG), Polaris Industries Inc (PII)

Highlights

The presenter is short shares of HOG, believing the company is very far from the sweet spot “Easy Rider days of Peter Fonda and Dennis Hopper.” Well known secular headwinds to HOG sales include: an aging baby boomer demographic, lower-priced bikes/ shifting consumer preferences, and increased competition in their core market. All of the above exacerbate the potential for incremental market share losses. The company’s EBIT is split approximately 50/50 between selling motorcycles and financing them with both segments expected to face headwinds in the coming quarters. In the presenter’s opinion, challenges to the company’s financing business could threaten HOG’s IG credit rating, which would substantially degrade HOG’s equity value as well.

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Idea Discussion

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