It's an oft-repeated maxim of investing that you have to act contrary to crowd psychology if you want to win over the long term. You've got to be willing to buy the stinkiest pieces of corporate foulness and also be willing to sell when things look almost impossibly shiny. With that in mind, and more than a 15% further drop in the price since last I wrote on it, I'm actually looking to see the positives in the Polaris (NYSE:PII) story.

Things are still tough for this leading maker of ATVs and snowmobiles. Revenue fell 13% from last year, and operating income dropped a further 17% to boot. Oddly enough, though, I still come away somewhat impressed. First, gross margin actually rose a bit. Second, the company scaled back its general and administrative spending by a meaningful degree (down 23%), but it didn't skimp on research and development, or on marketing.

Revenue by product segments really didn't hold any surprises. ATVs were down a little, but snowmobile sales plummeted as the company tries to work with dealers to reduce a glut of inventory. Motorcycle sales continue to rev higher, though from a rather insubstantial base, as Victory revenue accounted for less than 10% of the total.

Simply put, these are tough times for recreational-vehicle companies. Fleetwood (NYSE:FLE) and Brunswick (NYSE:BC) have both recently disappointed, and others, such as MarineProducts (AMEX:MPX) and Winnebago (NYSE:WGO), have been weak as well.

Oddly enough, perhaps, Harley-Davidson (NYSE:HDI) has been relatively stronger. Is this because Harley already had its difficulties and folks are buying into the notion that it's undervalued, or is it because motorcycles are a better place to be in investing terms? I think the answer may be "both" -- while I'd like to see Polaris do more with its utility vehicles and international sales, the motorcycle business could be an avenue toward growth, or at least better diversification.

I need to really roll up my sleeves and dig in to the valuation here, but I'm a lot more favorably inclined toward Polaris than I was before. You don't produce year after year of exceptional returns on capital by sheer luck or a fluke. And as time has shown, buying good companies when they're down is a good strategy for long-term outperformance.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).