More Evidence High Gas Prices May Help Harley Davidson

5 May 8:25am
Posted by ToddSullivan
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In early March I posed the question "is $3.25 gas helping Harley Davidson?" Now that the price is up to $3.50 and higher in most areas, there is more evidence unfolding that it may be true..

In the first post it was an Illinois dealership reporting increases in sales and now we have both a California dealership and a Florida insurance agency that insurs motorcycles in 21 states reporting the same thing.



The fact that the reports are coming in from both the sellers of the bikes and insurers in such regionally diverse areas has to assure investors that this is not a specific trend to a specific dealership or area but more of a widespread one.

Some of the comments I got after the first post were of the "a Harley gets the same mileage as my Prism" well, ring hollow. The simple reason is that I do not know too many drivers of Prisms, Escorts or other gas saver vehicles that own and drive a Harley. I do know plenty of F150, Suburban and Silverado drivers who do. In that case, you are doubling or even tripling your gas mileage and savings by making the switch.

Harley Davidson (HOG) recently lowered full year guidance to a level that, as gas prices continue their climb. I think are going to prove way to conservative as the year unfolds.


Disclosure ("none" means no position):Long HOG

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About

ToddSullivan

A Massachusetts based value investor, I look for companies whose current valuation is at a discount to their true value. When I purchase a stock, my typical holding period is several years. I consider buying a stock purchasing a piece of a business. I am confident once I make a decision to buy that eventually the market as a whole will recognize the true value of the business and value it accordingly. It may take 1 month, 6 months or a year, but if I buy it at enough of a discount to its true value my results will be (and have been) superior to the market as a whole. Of all the disparate investing disciplines, value investing has stood the test of time. The great investors of have all been value investors. Warren Buffett, Ben Graham, Bill Ruane (Sequoia Fund), Bill Miller and Wally Weitz, all have consistently outperformed the market for decades by using various forms of value investing. Currently I am a contributing writer to Seeking Alpha, Vinvesting.com, The Stock Masters and Value Investing News. Posts have been reprinted in The Wall St. Journal, Yahoo Finance, Google Alerts, Google Finance, TheStreet.com. 24/7 Wall St. and Topix.net.

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