Harley-Davidson Still Living High on the Hog

You won't get me to disagree with charges that Harley-DavidsonHDI might be seeking to "beat the shorts" through the booking of aggressive financial-service income. In fact, almost the entire upside surprise that jammed the stock up came from the financing arm.

Nor am I too fond of the increase in accounts receivable at HDI, and I didn't much care for the explanation -- some international excuse about shipping dates and times.

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Nevertheless, I can't get into the bear camp for Harley. Simply put, Harley is a manufacturing story with some growth in an era where most manufacturing stories have no growth. It is a success story in which there are many failures. It is a company that makes a product people want, a product that is universally acclaimed as excellent and if it would simply "do" what the shorts want it to -- stop fooling with the financing arms and bring down the receivables -- we would have a short-term disappointment but a long-term run-up. Because while HDI does some things I don't like, there are 16 million shares sold short because of those things, and they simply aren't alarming enough to merit such bearish attention.

Often, I have seen stories similar to this one, where the shorts have pounded on things like accounting issues and felt, "You know what, if what the shorts are saying is right, this story should be a single-digit stock." The difference here, though, is that unlike George Foreman grills, where there is no "there" there without the accounting shenanigans, what you are left with here is a darned good manufacturer with a darned good product going into a period where we are stimulating the economy like mad. That, to me, could make for an explosive move up if HDI simply stops doing the things the bears don't like, even if it cuts earnings per share.

That's always what I most feared as a short-seller, a company coming clean leaving 16 million shares to buy because the bear story has gone away.

Who won today's Face Off? Jim Cramer Herb Greenberg