Get your motors running! On Tuesday, August 15, Harley Davidson (HDI) will change its ticker symbol to "HOG." HOG is the acronym for the Harley Owners Group, but this was adopted long after the term was a nickname for the bikes world wide. No doubt the change in ticker symbol will serve as a form of brand extension, which Harley excels at better than most.
I can think of many companies like Coca-Cola, Pepsi, Starbucks, Disney, FedEx, Porsche, McDonald's, Yahoo, eBay, Google, J&J, GE, and on and on that have strong brands that have been extended to every kind of merchandise and promotion imaginable. However, very few end up tattooed on someone's body. J&J, don't think so. Yahoo not yet. Google, maybe it's coming. For Harley Davidson it is common. The only thing I can think of that comes close is Snoopy and Micky Mouse, but they may be fading and HDI, I mean HOG, is still growing and strengthening its brand like few others. Could they be influenced by GOOG's symbol, whose brand is growing by leaps and bounds -- that might be a stretch.
So this week when the HOG's invade the market they will be riding high, and that includes their stock price, which is approaching an all-time high. Even more incredible, the company's fundamentals are looking good and do not appear to be topping out!
With a P/E around 16, just under the market average, and a return-on-equity (ROE) double that at 31, plus a dividend, plus high profit margins, low debt, and recent openings of sales showrooms in China, the ride may just be beginning anew.
I have been following Harley for a long time, and when I started my investment company it was one of our first buys. It is one of the few original picks remaining in the portfolio, up 300%+ now (had some real stinkers too...CMGI & LU). When I got married my wife made me promise: no Harley and no Corvette, so perhaps I enjoy the irony of 'riding the stock' over the past decade.
If you are looking for a stock that is fundamentally sound, has a strong brand and solid management then you may want to consider going along for what might prove to be a very fun ride.
Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.
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Reader Comments (Page 1 of 1)
8-15-2006 @ 11:52AM
Bruce Gerhold said...
The HOGs are fat for market. I do not like the longer term signs: they have reached saturation and sales caps.
1. bikes are available in dealers and can be bought below sticker. Previous years - nothing available, bikes loaded with dealer extras, and priced above list.
2. Harley now advertises on TV - quite simply, they cannot sell the bikes they can produce.