HOG

Harley-Davidson, Inc.

Consumer, Industrial/Transportation


Presented:04/14/2021
Price:$40.72
Cap:$6.24B
Current Price:$35.24
Cap:$4.64B

Presented

Date04/14/2021
Price$40.72
Market Cap$6.24B
Ent Value$11.27B
P/E Ratio11634.29x
Book Value$11.27
Div Yield0.52%
Shares O/S153.31M
Ave Daily Vol2,284,397
Short Int10.37%

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: Ferrari N.V. (RACE), Harley-Davidson Inc (HOG), L Brands (LB), LVMH Moet Hennessy Louis Vuitton SE (MC FP)

Highlights

The presenter is long shares of Harley-Davidson, which he considers a "broken growth stock" that has suffered from bad management for over a decade. While he acknowledges that HOG has been a successful short because it's largely viewed as a brand going into obsolescence, he believes the perception that demand is waning and people do not want to ride motorcycles is false. HOG currently generates $400MM-$500MM of EBITDA; the presenter believes that the company can generate $1B in EBITDA if the new management team can execute on fixing the business and improving brand desirability. The stock is currently trading at $40, but he sees multiple expansion from here to reach a price target of $100 or ~12x EBITDA.

Over a 34 year period, HOG was one of the best-performing stocks in the market, being viewed as an amazing brand with a large TAM, strong top line growth, and consistently expanding margins. Although the motorcycle manufacturer currently commands over 50% market share, the presenter notes that the stock has not done well since well before the global financial crisis of 2008. 

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