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Author Topic: HOG  (Read 318 times)

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WaltKowalski

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HOG
« on: January 30, 2018, 06:20:19 pm »

What is behind the dip? I would think the news of an electric bike would provide a boost?

The culture is alive and well. Perhaps they have priced themselves out of the market?   
« Last Edit: January 30, 2018, 06:37:51 pm by WaltKowalski »
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Boardon Hamsay

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Re: HOG
« Reply #1 on: February 01, 2018, 08:50:25 pm »

Two topline reasons for the recent HOG dip are 1) RBC Analyst recently cutting their price target to $48 and 2) this is the 4th straight year of declining sales for HOG. The last quarter for HOG wasnít terrible but fund managers arenít going to flock to it due to continued sales declines.

More broadly, automobile sales are expected to decline in 2018 and even Thor and Winnebago, which had been on great runs, have recently sold off because demand for RVs is slowing.  I would argue that some money has slowly leaked from HOG into better growth names like Thor and Winnebago over the last few years. Now, the whole bunch is getting pin actioned a bit.

Lastly, and more recently, I think HOG will continue to be pressured and see limited upside until the sales story improves because otherwise, money is shifting more and more into autonomous driving names/themes and of course, Tesla, despite their issues.

If was going to play in this space, I think Thor still has upside from a solid order book the next few years and GM has the best pipeline for electric, autonomous, and traditional automotive themes. Another couple names that tend to be more indirect plays into this space are Nvidia and Lear Corp. I just took profits on Nvidia and am hoping for a dip to rebuild my position. Lear should be solid to scale into on weakness as well.

« Last Edit: February 01, 2018, 09:13:52 pm by Boardon Hamsay »
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WaltKowalski

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Re: HOG
« Reply #2 on: February 03, 2018, 03:10:15 pm »

Two topline reasons for the recent HOG dip are 1) RBC Analyst recently cutting their price target to $48 and 2) this is the 4th straight year of declining sales for HOG. The last quarter for HOG wasnít terrible but fund managers arenít going to flock to it due to continued sales declines.

More broadly, automobile sales are expected to decline in 2018 and even Thor and Winnebago, which had been on great runs, have recently sold off because demand for RVs is slowing.  I would argue that some money has slowly leaked from HOG into better growth names like Thor and Winnebago over the last few years. Now, the whole bunch is getting pin actioned a bit.

Lastly, and more recently, I think HOG will continue to be pressured and see limited upside until the sales story improves because otherwise, money is shifting more and more into autonomous driving names/themes and of course, Tesla, despite their issues.

If was going to play in this space, I think Thor still has upside from a solid order book the next few years and GM has the best pipeline for electric, autonomous, and traditional automotive themes. Another couple names that tend to be more indirect plays into this space are Nvidia and Lear Corp. I just took profits on Nvidia and am hoping for a dip to rebuild my position. Lear should be solid to scale into on weakness as well.

Damn you sound like you do this for a living. I just had a common sense hunch that as the white collar class recovers so will sales. I know there are a few roadsters out that will pull customers but the starting price there is around 25k so not exactly a white collar toy. And with Tesla selling more stock than wheels I have reservations there too. And the solar shingle deal seems like another idea that is before its time. The price point is still too damn high.

But it sounds like you know what you are talking about and I appreciate the free advice.
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WaltKowalski

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Re: HOG
« Reply #3 on: February 03, 2018, 03:11:40 pm »

Also I think the emissions penalty will be lifted
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Boardon Hamsay

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Re: HOG
« Reply #4 on: February 03, 2018, 09:21:52 pm »

Damn you sound like you do this for a living. I just had a common sense hunch that as the white collar class recovers so will sales. I know there are a few roadsters out that will pull customers but the starting price there is around 25k so not exactly a white collar toy. And with Tesla selling more stock than wheels I have reservations there too. And the solar shingle deal seems like another idea that is before its time. The price point is still too damn high.

But it sounds like you know what you are talking about and I appreciate the free advice.

Iím just a part time, home gamer at the moment, investing wise. Spare time investor but quite avid.

Iíd be curious to see what the next quarter looks like as maybe the tax changes help them in the short term. More long term though, Iíd still be a bit concerned that the next bike up cycle may not be well timed with where we are in the business cycle.

The other concern I have with HOG is demographics. I am no expert but my hunch is that the average HOG buyer pool is slowly aging out of the market. Along with the price concerns you noted correctly, I donít believe HOG is winning with millennials. They really need to do a better job of bringing the next generation into the brand, IMO. That could go a long way towards righting the sales story. Until they get that figured out, itís hard for me to recommend HOG stock for anything beyond a short term trade.

As for Tesla, I think itís a cult stock. The company burns through cash, canít seem to hit production goals, and that makes me wonder what shortcuts are being taken in product testing or elsewhere. Iím always thinking Tesla is one day away from a massive recall for something. The stock valuation is beyond euphoric to me but it keeps finding support in the low $300s as of late. Give Elon Musk credit though, heís a great marketer/showman.  I like his ideas but think he has too many irons in the fire that prevent him from being better at the execution side of some things.
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Ash

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Re: HOG
« Reply #5 on: February 15, 2018, 10:42:24 am »

Harley has two big issues in my opinion and as an owner:

1) The 'HD' culture does not resonate at all with younger riders. Especially below mid-30's in age
2) They have completely priced themselves out of competition.

The second one is easier to fix than the first. Moving the M8 engine to oil cooled is a good step. Stop focusing so much on expensive baggers. Update the sportster line.

The first one is a huge problem that echos through the dealerships. I have no idea how they fix it after spending decades promoting it.
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