Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, motorcycle specialist Harley-Davidson (NYSE: HOG ) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Harley's business and see what CAPS investors are saying about the stock right now.
CEO Keith Wandell (since 2009)
CFO John Olin (since 2009)
|Return on Equity (Average Past 3 Years)
||$931.91 million / $5.76 billion
Honda Motor (NYSE: HMC )
Polaris Industries (NYSE: PII )
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 22% of the 1,866 members who have rated Harley believe the stock will underperform the S&P 500 going forward. These bears include HoweirdRoark and All-Star JaysRage, who is ranked in the top 15% of our community.
Late last month, HoweirdRoark touched on Harley's seemingly unsustainable valuation: "I am a fan of Harleys ... but I don't understand the valuation on this company. Stagnant revenue, high P/E, high P/B; I don't see where the growth potential is."
In fact, Harley currently sports a PEG ratio of 1.9. That represents a premium to competitors Honda (0.4) and Polaris (1.3), as well as other recreational vehicle stocks like Thor Industries (0.8) and Winnebago (NYSE: WGO ) (0.6).
CAPS All-Star JaysRage elaborates on the bear case:
Harley Davidson has done a reasonable job of rebuilding themselves into a viable business model with sustainable costs. That said, the brand is not what it once was. Unless Harley can effectively brand itself with one of the younger generations, continuing to milk their older customers with "Trikes" and other offerings is only delaying inevitable, the death of this once great company.
They have also had a run-up far past what the improvements will gain them in the short term.
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