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 S&P 500 settled lower by 0.8% after early strength turned into afternoon weakness.
Today's headline event came in the form of Ben Bernanke's testimony before the Joint Economic Committee. During his remarks, Chairman Bernanke said premature tightening of monetary policy could stall the pace of recovery. This followed weeks of conflicting remarks from FOMC members, which sparked speculation regarding possible changes to the Fed's policy course.
However, ... More
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