Harley Davidson Stock: Becoming A Bank Again

Harley Davidson should be one of those companies that delivers solid, steady investment returns. It has the premier brand name in the manufacture and sale of motorcycles, and earns 23% operating margins in an industry where 14% operating margins are the norm. Heck, can you even name its competitors? I could name Yamaha, Kawasaki, and Polaris, and that was it.

Despite these superior operating results, Harley Davidson stock has barely appreciated in price over the past twenty years. It traded at $29 per share in 1999. It trades in the $30s now.

Why aren’t the shareholders of the most dominant motorcycle franchise on the continent getting any richer?

The answer is because Harley Davidson’s management team is not satisfied with modest single digit (think 4-6%) sales growth, similar earnings per share growth, and the return of cash to shareholders in the form of dividends and share repurchases.

Instead, it wants … Read the rest of this article!

Washington University Students Are Protesting Peabody Energy

Tim, I know you’re from the St. Louis area. You’ve probably heard about the protests from many members of the Washington University student community about Peabody Energy. In general, how do you think about corporate protesting, and more applicably to your blog, shareholder activism?

Also, I love your blog.

Thanks in advance,

Larry T.

Thanks Larry! As some of you have already noticed, I added a tab to the site for general reader questions that I plan to answer on Sunday as part of a new “Sunday Mailbag” series I’m starting to see if it gains traction. If you have any general question that you think readers of this site would be interested in seeing discussed, feel free to e-mail me at: tim@theconservativeincomeinvestor.com .

For those of you who haven’t heard, a news story in St. Louis lately has been that many Wash U students have been hosting sit-ins for … Read the rest of this article!