Sold Harley Davidson

Harley-Davidson, Inc. (HDI)
SSG and PERT | Google “Stocks: HDI” |Company Website

We sold Harley Davidson on June 28, 2006. Although a high quality company, HDI is no longer a growth company. Projected average return is under 8%. The proceeds from the sale were invested in other companies in the portfolio with better long term prospects.

Prior Analysis of Harley Davidson from May 2005

Stock Selection Guide Updated. Harley Davidson’s share prices got shwacked when it announced its quarterly earnings. Sales only increased 6.3% over the same quarter last year. This is the second quarter in a row in which sales growth disappointed. (Last quarter sales increased 5.4% over the same quarter one year before.)

The stock selection guide for HDI has been revised to reflect projected 5-yr sales growth of 7.5%. This is a conservative projection. HDI derives revenue from motorcycles, parts & accessories and financing.

Value Line rates HDI’s financial strength B++ and its earnings predictabiltiy 100 (out of 100). HDI has a (RQR) quality rating of 71 (out of 100). Note that Morningstar has lowered its fair value estimate for to $44 per share from $55 to reflect slow growth in the next few years nd only rates HDI with two stars.

HDI remains a high quality company but currently it is in the “hold” range.

Company Description: Harley-Davidson, Inc. manufactures heavyweight custom and touring motorcycles and related products. Also owns Buell Motorcycle (sport and performance motorcycles) and Eaglemark Financial, a wholesale and retail finance unit. Sold Holiday Rambler Corp. in 1995. Harley is the only major American manufacturer of heavyweight motorcycles. Has over 1,000 dealers worldwide. Foreign business is about 18% of sales; R&D, 3.2%. ’03 depreciation rate: 9.0%. Has about 8,800 employees. Officers & directors own 1.5% of stock; AXA Assurances I.A.R.D. Mutuelle, 6.4%. (3/04 Proxy). Chairman and CEO: Jeffrey Bleustein. Inc.: Delaware. Add.: 3700 W. Juneau Ave., Milwaukee, WI 53208. Telephone: 414-342-4680. Internet: www.harley-davidson.com.