Monthly dose of industry news...

[PapaUtah]

PII

Polaris reported 1Q06 EPS of $0.26 compared to $0.40 a year ago, including the impact from SFAS 123. Total revenue declined 6.9% as ATV production was cut to help offset high dealer inventories. ATV revenue declined 8.4% and snowmobile revenue was down 64.7% (on a very small quarter). The bright spot in the quarter was the growth in Victory Motorcycles (retail sales grew in excess of 30%).

HDI

Harley-Davidson shares fell Wednesday after the iconic motorcycle maker announced first-quarter earnings that surpassed last year, but sales and shipment numbers that lagged behind analysts' expectations.

The Milwaukee-based company reported earnings of $234.6 million, or 86 cents per share, for the three months that ended March 26. Earnings per share were on par with analysts' estimates and represented nearly a 12 percent increase from the year-ago quarter.

U.S. retail sales increased 5.8 percent in the first quarter but did not keep pace with the 6.8 percent growth of the heavyweight motorcycle market in the country. The news disappointed analysts. Dealer inventory levels are high, retail sales growth will be a critical metric in the next two quarters.

Analysts note, “If retail sales do not improve during the first half of this year, Harley will either need to institute another shipment cut and another reduction in shipment guidance, or add additional inventory, which jeopardizes Harley's brand equity.”

More news coming as it is reported...looks like a good year for U.S motorcycle sales...

:clap:

 

[Groo]

Looks like HD is stuffing the channel...

 

[devanator]

John

Keep the reports coming. Thanks for the info.

Mike/devanator

 

[Bigboi]

Sunday, April 16, 2006

By Lauren Rudd

The April 3 issue of Fortune magazine posed the following question: The median stock ownership of U.S. households is (a) $78,700, ( B) $24,300 or © $0.

The answer is © $0. According to Fortune, the latest (2004) Federal Reserve data shows that just 48.6 percent of U.S. households own stock, meaning the median ownership is zero. The median holding for households that do own stock is only $24,300.

It gets worse. Two-thirds of stock market wealth is held by 5 percent of the population. While that statistic has decidedly critical political implications, let's take it down to a simpler more personal level. Why would anyone not own some sort of an equity investment?

Tragically, there is a portion of the population whose income is perilously close to, or below, the poverty line. For those individuals investing in anything other than food and shelter is simply not an option. For anyone else, not using the equity markets to build wealth places you one step closer to spending your golden years working under the golden arches.

Strong words perhaps but said with sincerity. No, a retirement plan at work is not enough. If you do not believe me, try to find Enron's employee retirement fund.

Even industrial icons, such as General Motors, have seen their retirement funds take a considerable hit. In the case of GM the reason was partially due to the large amount of GM stock the fund held and refused to sell as GM's corporate performance began to resemble the glide path of a brick.

An annual contribution to an individual retirement account (IRA) is a good first step, but it is only that, a first step. Everyone with access to disposable income should be placing a portion of that income in an equity portfolio that he or she manages. Yes, I have intentionally left out mutual funds. If you have not already done so, it is time to step up to the bar and take responsibility for your financial future.

No, it is not difficult. If you have the wherewithal to be able to write your name and address and can use a telephone or a computer, you are over halfway there. The next step is a little more difficult but not much. You need to select a deep discount brokerage firm. If you cannot find one, write to me and I will give you the names of several. You want to keep your commission costs per transaction to under $10; that way your commission cost is 5 percent or less.

So now for the big question: What stocks do you invest in? If you steer in the direction of large profitable blue chip companies with a history of paying dividends, you will not go too far wrong and over time your portfolio will likely increase in value.

If you want an idea to start your thinking process, consider Harley-Davidson (Ticker: HDI). The company is one of my favorites and it just announced its first-quarter earnings. Despite record numbers and the ever increasing price of gasoline, the Street sent the shares tumbling by more than 5 percent on worries over whether Harley can keep its momentum going. That same worry surfaces almost every year.

When I last wrote about the company exactly a year ago, the shares were trading at $48.93. My 2006 earnings estimate was $3.56 per share and the shares commanded a multiple or P/E ratio of 19.6. Today the shares are trading around $50, after taking a hit of 5.21 percent on Wednesday.

Reporting a record first-quarter performance, the company said that first-quarter net profit was 86 cents per share, up from 77 cents per share a year ago. Sales rose 4 percent to $1.29 billion.

Calculating the company's intrinsic value, using a discounted earnings approach with a conservative earnings growth rate of 7.84 percent and an 11 percent discount rate, yields an intrinsic value of $73.07.

A discounted free cash flow model, with the same earnings growth rate, produces an intrinsic value of $78.30. Furthermore, I am raising my 2006 earnings per share estimate to $3.70 per share.

At the current P/E multiple of 14.68, that would result in a per-share price of $54.32 for an annualized gain over the next nine months of 11 percent, before the 1.2 percent dividend yield.

:clap:

 

[OrangevaleFJR]

My best buddy is a stock broker and the statistics that he spouts of all the time seem pretty scary. Are all these statistics new? I'd like to see these figures compared to 1955. It would be an interesting comparison.

 

[donaldb]

Man I lost my *** in buying stocks on my own--WorldCom, Friede Goldman, HTMM and a few others--they are all gone now w/my $ and I am still writing them off year after year on taxes. Wont make that mistake again. All my investments are handled by pro's. Playing w/stock market w/some play $ as I did was not such a bitter pill to swollow, but those poor soul's who lost everything by going solo I really feel sorry for. Lots of older people I know now having to work who invested heavy in co's like Worldcom and Enron, etc. lost most everything. All I lost was about 15K and I was in my late 30's early 40's at the time. I wasnt about to take on stock investments w/serious $ for my future. Thought I would play the game and see if I was any good---wrong!!!!!!!!! My fun will have to stay on 2 wheels--it's easier to get my monthly statements for review in the mail. They seem to know what they are doing much better then me. I like what I am seeing recently, a bit of a up tick in the market accross the board lately--at least the past several months anyway.

 

[PapaUtah]

When growth works, it works very well for a very short time. Study after study points to owning steady, dividend paying stocks as an indicator of long-term appreciation. HDI is coming out of the growth phase and could very well be a steady dividend payer going forward. Just don't look for gaudy 20% returns from price appreciation anytime soon.

 

[Bigboi]

B) Buying stock does work!

 

[Woodstock]

B) Buying stock does work!

IMO: Buying individual stocks _may_ work, but in the same way that 5 flips of a coin _may_ come up heads each time. While there are many examples of people getting lucky with a single stock, there are many more examples of people getting unlucky.

I'm a bigger fan of passive investing. DFA Funds for example.