Harley-Davidson - PowerPoint

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					Harley-Davidson




   Company Analysis
     By Ben Matone
                 The Company

   Harley-Davidson, Inc., through its subsidiaries,
    produces heavyweight motorcycles, motorcycle
    parts, and related accessories principally in the
    United States and internationally. It operates in
    two segments, Motorcycles and Related Products
    and Financial Services.
   The Company itself, is over 100 years old, and
    continues to appeal to the market of “inherent
    attitude,” leading the motorcycle Industry and is
    one of America's premier iconic brands.
Industry (Recreational Vehicles)
   The recreational vehicle (RV) manufacturing
    industry in the US consists of about 800
    companies with combined annual revenue of $12
    billion.
   The industry is highly concentrated: the five
    largest manufacturers hold more than 60 percent
    of the market.
   Industry growth during the last decade has come
    from increasing volume in the United States
    where unit sales have seen 13.7% compounded
    annual growth since 1998.
Industry Competitors vs. HOG

                 Market            Profit                     Div      Long
                           P/E               ROE     D/E
                  Cap              Margin                    Yield   Term D/E



Industry (RVs)     23.0B    17.8       7.2    23.3     0.4    1.78       0.38


        HOG        16.0B    17.1      16.5    34.7    0.35     1.4       0.35


        HMC      118.97B   22.21      6.15   16.54   0.827       1          -


          PII       1.6B   13.54       5.2   38.73    0.26     3.1       0.26
    Performance of Harley Davidson
   P/E: 17.10 Yield:1.40%
   Beta : 1.05
   2005 EPS $3.41
   2006 EPS $3.79
   est. 2007 EPS $4.16
   D/E : .349
   2005 Sales: $5,673.8 (mil)
   1 yr. NI growth: 7.8%
   (Chart to the right compares
    Harley-Davidson to the 2
    major competitors, Honda
    (HMC) and Polaris Industries
    (PII)
                Performance Cont…
   The company has
    maintained a pretty
    steady sales and
    earnings growth increase
    over last 5 years.
   Saw a 12% rise in
    motorcycles sales in the
    3rd quarter of 2005.
   52wk Range: $44.40-
    $62.33
             Recent Developments
   The company had a Gross Profit increase of $143,398 (value
    in thousands) over the 2004-2005 fiscal year.

   9/14/06- Board of Directors approved a cash dividend of
    $0.21 per share for the third quarter of 2006. The dividend
    is payable October 13, 2006 to the holders of record of the
    Company's common stock on October 3, 2006.

   6/06 - Harley-Davidson appoints Beijing Feng Huo Lun
    (FHL) as the first authorized Harley-Davidson dealer on
    mainland China.

   8/28/06- Harley-Davidson said it is establishing an entity
    called New Castalloy as a wholly owned manufacturing
    operation that is expected to employ about 300 people at
    the site in North Plympton, Adelaide, South Australia;
    (Harley-Davidson said it expects to close the transaction
    toward the end of September).
                      Evaluation
   HOLD (5 Main points)*
   1.) The company has an estimated growth of
    14.6% for the current quarter with a 9.5% for next
    quarter.
   2.) The company pays a solid dividend, has a
    rabidly loyal customer base, and sports a return on
    assets of nearly 18%.
   3.) The Company has a time-tested brand, great
    margins, and strong free cash flow
   4.) Had a current sales growth of 10.3% this year
   5.) Earnings Growth this year 11.1%
   * on a side note Thomson Financial viewed it as a very strong
    hold (ranked 14).