Barron’s magazine has a lot to say about Harley-Davidson’s brand recognition power in a recent article. Even more impressive is that they go on to say that while these may be tough times for the motorcycle industry, this is the time to invest in H-D stock. From the report:
The maker of heavyweight motorcycles has a market capitalization of less than $12 billion, but the name recognition of companies many times its size. For the past seven years, Harley has finished in the top half of consultant Interbrand’s annual survey of the 100 best global consumer brands, in a league with giants such as Coca-Cola and Walt Disney. Its brand cachet, together with the quality of its products, has helped the Milwaukee-based company establish a lengthy track record of double-digit earnings gains and strong stock-market returns.
The growth in U.S. bike sales has slowed, and increasing anxiety about a potential domestic recession has sunk the stock, along with many other consumer-discretionary shares. Harley has fallen nearly 40% in the past 12 months, to around 46, from a high of 75.50. Its shares now trade at levels first reached in the summer of 2000, ahead of an economic recession, when Harley was producing just 60% as many bikes as it does now.
Yet when Wall Street throws in the towel on Harley-Davidson -as it seems to do every few years - that is usually the best time to buy shares. Harley has fallen 30% to 40% ahead of previous U.S. recessions, only to rebound when the economy perks up. This time, the stock could top 60, although that is unlikely to happen tomorrow, or the day after.
The entire article can be read by clicking here.
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