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Wednesday's Columnist Conversation I noted that at least one
dealer, Chicago Harley-Davidson, was advertising on its Web site prices
the manufacturer's suggested retail price. My oh my, guess what is no longer on Chicago Harley's Web site! As if you couldn't guess -- no more mentions of discounts! (Can't imagine the wrath of Mother Harley!)
Even Banc of America Securities analyst Gary Cooper -- a Harley bull -- today conceded that his survey of 60 dealers tells him prices have declined, premiums above MSRP have declined, waiting lists are shorter, and "the much-discussed gap between supply and demand of Harley-Davidson motorcycles has begun to close this year."
Despite his negative observations, Cooper remained positive on Harley, as did a host of other analysts who came to the company's defense today. (Their reports appeared like clockwork!) But interestingly, the other analysts didn't see the slowdown that Cooper saw. (Funny how that works!) And now analysts are saying forget this year or next -- the
boom in Harley, they say, will be in 2003, when the company sells its commemorative 100th anniversary bikes. (Where did
story come from? If you didn't know better, you'd say the old story wasn't working so they had to switch to something new! More than a year out, no less!)
Reality is that Harley's sales growth, though up sequentially, has been slowing in recent quarters, and if demand doesn't improve at some point, dealers will stop allowing themselves to be stuffed with more bikes than they can sell, and this in turn will result in lower shipments for Harley.
Something's gotta give!
Or so you'd think.
This week Harley filed its 10-Q with the
Among the eyebrow-raisers: The provision for bad debt
from the prior quarter while finance receivables pretty much stayed the same. You could argue that with the bigger provision, the company is being more conservative. But you could also argue that the company believes it might not be able to collect on many of the bikes sold in recent months -- especially those sold with aggressive financing -- and this would mean revenues weren't quite what they appeared to be.
That's not all: The company gave no details on any noncash gain on the sale of its securitized loan portfolio;
as reported here previously, it is believed that such a gain helped Harley beat earnings estimates in recent quarters.
A company spokesman couldn't be reached.
, a distributor and retailer of nuts and bolts, continues to confound. (The shorts, that is.) Here's a company whose monthly sales growth on a daily basis continues to decline year over year, yet its stock is up 8% for the year. And it's up even though analysts have trimmed 2001 estimates. As one short says, "The stock traded for about $40 the last time they earned this much -- in 1999 -- and clearly things have changed for the worse." It currently trades at around $59. Last year revenues were up 22.4%; this year Robert W. Baird & Co. is projecting they'll be up a mere 8.4%. At the same time the balance sheet continues to deteriorate, with receivable days outstanding and payables -- the amount owed to suppliers -- rising. So what's keeping the stock up? Good question. If
(see my column Wednesday) is the Teflon stock, Fastenal is Teflon II.
Odette Galli's bullish mention on the Columnist Conversation on
. To update this column's readers, several hedge fund managers who were short the stock tell me they since covered in the mid-40s. Emerson was
first mentioned here as vulnerable when it was at $67, because of the technology part of its biz. One manager who is still short noted that the company, which isn't known for being forthcoming, offered only a recorded message --
a conference call -- when it reported fiscal fourth-quarter earnings earlier in the week.
Also of interest: Quarterly process-control sales rose a mere 1.8% from a year earlier, suggesting the first sign of weakness in the unit's sales this year. Sales in that business, measured monthly against year-ago levels, had been rising by double digits. In fact, the most recent quarter's data show that orders slumped throughout the company -- especially in electronics and telecommunications, formerly the company's driver. Sales there tumbled 36% from last year.
: News that the Hewlett family was voting against
bid to buy
is certainly not a vote of confidence for H-P CEO Carly Fiorina. "In politics and in war, they refer to it as 'securing your base,' " says the always-savvy Jeff Matthews of RamPartners. "She never secured her base."
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback and invites you to send any to
Herb Greenberg. Greenberg also writes a monthly column for Fortune.
Brian Harris and Mark Martinez assisted with the reporting of this column.