Of all the tidbits of insight I've heard over these few crazy months, the most telling came from an investor who appeared on CNBC last fall and, being completely serious, advised, "There're only two positions to be in right now: cash, and fetal."

Chicken Little, meet Wall Street. Proceed to swap emotions.  
I get it. It's atrocious out there. Many companies that overleveraged their balance sheets are permanently impaired and will likely never rebound -- companies like AIG (NYSE:AIG) come to mind. We had an unprecedented boom, and now we're in the middle of an unprecedented bust.

Nevertheless, history tells us time and time again that market panics and forced sell-offs indiscriminately throw the good out with the bad. Amid the frenzy over financial markets and the "sell-now-ask-questions-later" mood of global investors, opportunities are being created for bargain-hunting investors like we haven't seen in decades.

Using the wisdom of our 130,000-member-strong CAPS community, I've come across what could be one of those bargain opportunities, Harley-Davidson (NYSE:HOG).

CAPS Rating (out of 5)

**

One-year performance

(76%)

Recent share price

$8.90

2009 EPS estimates

$1.59

Trailing-12-month EPS

$2.84

Market cap

$2.1 billion

Total cash and short-term investments

$594 million

Current ratio

2.1x

Fools bullish on Harley are also bullish on:

General Electric (NYSE:GE), Apple (NASDAQ:AAPL)

Fools bearish on Harley are also bearish on:

Ford (NYSE:F), Citigroup (NYSE:C)

Data from Motley Fool CAPS and Capital IQ, a division of Standard & Poor's, as of March 4.

Revving up the value engine
I can see why some think Harley is a terrible stock to own right now. Motorcycles are typically a second or third vehicle -- the epitome of discretionary spending. Baby boomers who may have enjoyed a Harley in their golden years just had their 401(k)s incinerated. Sales are falling off a cliff. Its finance unit is in shambles. Its credit ratings just got slashed. Oh, and the dividend? That was just axed by 70%, too.

So what's the good news? Easy. The only thing that's fallen faster than Harley's short-term prospects is its stock price, and that's setting up quite an opportunity for long-term inventors.

As CAPS member LondonMatt wrote late last year:

My motorcycle was stolen last week, and instead of buying a new motorcycle with the proceeds, I am going to buy [Harley] stock. ... I'll trade a Sportster today (it's too cold anyhow) for a Fat Boy tomorrow ... while you wait for the market to turn, reasonable profit and gross margin, and a chance to own one of the finest, most sought-after brand names in America at a bargain price. What's not to love about this stock? Deep value territory for those prepared to hold for the long run.

Harley is not General Motors (NYSE:GM) on two wheels. It's consistently profitable, albeit less than it used to be. How much less? Over the next three years, here's what consensus earnings per share estimates look like:

Year

2009

2010

2011

EPS Estimates

$1.59

$1.83

$2.18

Source: Capital IQ, a division of Standard & Poor's.

By those estimates, Harley trades at all of 5.6 times forward earnings. Of course, long-term predictions should be taken with a grain of salt. Pity the poor analyst who's forced to foretell the next one to three years in a world where tomorrow is anyone's guess.

Therefore, let's eliminate the benefit of the doubt and assume estimates are way optimistic. We'll give them a 50% haircut. What's Harley stock look like then? At $9 per share, halving earnings estimates would put shares at just over 11 times 2009 estimates -- hardly expensive by any measure. Go out a year or two, and halving estimates still leaves shares at less than 10 times projections.

When estimates can be cut in half and a company like Harley -- whose brand is second to none -- can still be bought at what would otherwise be seen as bargain prices, you have to think the sell-off is overcooked. I'm not calling this a bottom; I'm calling this cheap. There's a big difference.

Your turn to chime in
Disagree? See it in another light? Just want to see what the rest of the pack is saying? More than 130,000 investors use CAPS to share ideas and swap opinions. Click here to check it out. It's 100% free to participate.

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Apple is a Motley Fool Stock Advisor recommendation. The Motley Fool is investors writing for investors.