July15, 2003 Harley-Davidson (HDI)
No, I am not a biker kind of investor! Frankly, I confess I have NEVER ridden a motorcycle but still remember Dennis Hopper's performance along with Jack Nicholson in Easy Rider. Boy does THAT date me. Anyhow, enough of reminiscing...

Harley-Davidson (HDI) had a great day today. Even in a down market, Harley 'cycled' to a nice gain today closing at $43.68 up $1.89 or 4.52% on the day.

Harley is a perennial growth stock favorite but I do not own any shares and haven't looked closely at the numbers until today. Last quarter's results were reported on April 16, 2003, and Harley related that revenue for the quarter ending March 30, 2003, was $1.1 billion compared to $927.8 million in the year-ago quarter...a 20.0 percent increase. (as reported in Yahoo.com).

Diluted earnings per share were $.61 a 56.4% increase compared to last year's $.39.

It looks like the street is anticipating good results to be released soon for the second quarter as it is now almost exactly 3 months since the last results were reported....that might explain the rise today.

Looking at Morningstar, we see the beautiful linear improvement in revenue starting with $2.1 billion in 1998, $2.6 billion in 1999, $3.1 billion in 2000, $3.6 billion in 2001, $4.3 billion in 2002, and extrapolating from the first quarter we would have at least $4.4 billion in 2003.

Free cash flow is quite impressive improving from $362 million in 2000, to $466 billion in 2001, $456 million in 2002 and $610 million in the 'trailing twelve months' per Morningstar.com.

The company has plenty of cash at $890.7 million with $1.45 billion in other current assets. Current liabilities are a generous $954.4 million with $648 million in long-term liabilities. There is plenty of cash to cover the debt but the debt level is certainly not insignificant.

Harley has a market cap of $12.6 billion per Yahoo with 302.3 million shares outstanding and 301.6 million shares floating. There is small dividend of $.16/share with a yield of 0.38%.

The p/e is a relatively reasonable 19.71, especially with $2.95/share in cash. There are 19.3 million shares out short as of 6/9/03 which represents 7.17 trading days....so not quite enough for a huge short squeeze...but if the stock starts rising....there may be a few short sellers out there scrambling to cover.

I like Harley even if their cycles ARE a bit noisy.

They are a classic growth company and the numbers at first glance certainly do not show a marked slowdown in the growth of this company. A nice company to add to your portfolio!

Regards to all of my friends! Thanks for stopping by. Please contact me at bobsadviceforstocks@lycos.com if you have any questions, comments or words of encouragements!

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Bob