Harley shares roar yet again
This time, the cycle maker's shares jump on an estimate boost. But takeover talk still fuels the stock.
This is a loud, lovely time to be a shareholder of Harley-Davidson (HOG).
The shares jumped 10.5% to $31.37 today after RBC Capital Markets analyst Edward Arnold raised his target for the stock to $36 from $32.
The stock was the second-best performer in the Standard & Poor's 500 Index ($INX). Volume topped 10.4 million shares, nearly three times the average for the stock over the last three weeks.
Maybe the talk of a leveraged buyout bid from Kohlberg Kravis & Roberts will materialize. Reuters says at least one analyst believes an offers is unlikely.
In the meantime, Arnold likes Harley.
Retails sales generally are firming up, he wrote clients today. Auto sales have improved, and pricing for motorcycles has firmed.
As a result, he thinks Harley-Davidson's first-quarter earnings, due April 20, could reverse a recent trend of earnings disappointments.
So, do you buy Harley? Maybe. But the stock is now pricey. It's selling at 17 times forward earnings and 105 times trailing earnings.
Plus, as Michael Brush noted recently, it's got problems. The economy has exacted a big toll.
Plus, the Corporate Library thinks its governance is lacking. It staggers directors' terms, and many board members have direct relationships with the company.
The result may be that the company's management isn't pushed hard enough.
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[BRIEFING.COM] The stock market punctuated July with a broad-based retreat that sent the S&P 500 lower by 2.0% with all ten sectors ending in the red. The benchmark index posted a monthly decline of 1.5%, while the Russell 2000 (-2.3%) underperformed to end the month lower by 6.1%.
To get a better feel for what led to today's retreat, we'd like to look back to Wednesday, when the market had ample reason to rally, but did not. Instead, it ended basically flat after a sloppy day of ... More
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