3 Reasons to Buy Harley-Davidson Today

Historically, tumultuous times offer some of the best opportunities to unearth killer stocks, and the market's recent mess surely qualifies. While many investors avoid mainstay stocks today, some think heavyweight motorcycle maker Harley-Davidson (NYSE: HOG  ) is worth sticking with.

In our Motley Fool CAPS community, about 77% of the 1,870 investors who've rated the company are bullish. There's no shortage of reasons why Harley-Davidson will thrive, three of which I've highlighted below.

But here at the Motley Fool, we're all for looking at both the good and bad sides of an investment. Once you're done with this article, you can read the case against the stock, weigh in with your own comments below, or rate Harley-Davidson yourself in CAPS.

1. Financial progress
Like automaker Ford's (NYSE: F  ) recent steps in the right direction, Harley has also made aggressive moves to adjust to the current sales environment. It has reduced inventories, restructured operations, and impressed many with its ability to pull in positive cash from operations during a difficult environment. Some investors think the company's moves put it in a great position for long-term profitability.  

2. Strong brand
Harley-Davidson has had a long-standing iconic image that's as recognizable as Coca-Cola (NYSE: KO  ) or General Electric (NYSE: GE  ) to many Americans. The company has attracted the confidence of Warren Buffett's Berkshire Hathaway (NYSE: BRK-B  ) , and its brand has generated a strong following of loyal customers over the years. A deep-rooted brand like that can't be held down for long, and it serves the company well in the long run.  

3. Tapping new markets
Harley wants to tap one of the largest motorcycle markets by introducing new models in India, where bikes from Honda (NYSE: HMC  ) and other homegrown brands have seen big growth recently. With Tata Motors (NYSE: TTM  ) seeing improving auto sales in India, and the Indian government making great advancements in fiscal progress, some investors see an early move into an emerging and rapidly growing market as a smart way to expand Harley's customer base.

To see details of what CAPS members are saying now about Harley-Davidson, just click on over to Motley Fool CAPS and have a look -- or add your own thoughts directly to this story in the comments box below.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 54 points on average, take a free 30-day trial.

Fool contributor Dave Mock owns shares of Coca Cola. Berkshire Hathaway and Coca-Cola are Inside Value selections. Berkshire and Ford are Stock Advisor picks. Coca-Cola is an Income Investor choice. The Fool owns shares of Berkshire. The Fool's disclosure policy won't double-dip or backwash.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 05, 2010, at 12:58 PM, kurtdabear wrote:

    Think twice about jumping into HOG at this point. Hollywood superstar wannabe MC gangs are not going to support the whole company in the current economic environment, and there's plenty of competition for sales of bikes and trikes in Chindia.

    Furthermore, regardless of cost-cutting and a bit of operating profit, HOG has a huge overhang of financing from its boom days that contains a lot of doubtful accounts.

    Nobody can argue with the brand name recognition--Harley is nearly as highly regarded as Indian is, er, I mean was. Gee what happened to Indian? Can it be that buying a $20,000 toy is different than buying a Coke during a depression?

    HOG will probably recover some time after the housing market does--like maybe around 2018 or 2020.

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