Harley-Davidson Inc (HOG): Today's Featured Automotive Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Harley-Davidson ( HOG) pushed the Automotive industry lower today making it today's featured Automotive laggard. The industry as a whole closed the day down 0.5%. By the end of trading, Harley-Davidson fell $1.70 (-3.1%) to $52.79 on heavy volume. Throughout the day, 2.7 million shares of Harley-Davidson exchanged hands as compared to its average daily volume of 1.5 million shares. The stock ranged in price between $52.60-$53.84 after having opened the day at $53.75 as compared to the previous trading day's close of $54.49. Other companies within the Automotive industry that declined today were: Strattec Security Corporation ( STRT), down 4.5%, Orbital Corporation ( OBT), down 3.8%, Quantum Fuel Systems Technologies Worldwide ( QTWW), down 3.7%, and Meritor ( MTOR), down 3.5%.
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Harley-Davidson, Inc. manufactures heavyweight cruiser and touring motorcycles. The company operates through two segments: the Motorcycles segment and the Financial Services segment. Harley-Davidson has a market cap of $12.54 billion and is part of the consumer goods sector. The company has a P/E ratio of 20.4, above the S&P 500 P/E ratio of 17.7. Shares are up 11.6% year to date as of the close of trading on Monday. Currently there are 13 analysts that rate Harley-Davidson a buy, no analysts rate it a sell, and two rate it a hold.

TheStreet Ratings rates Harley-Davidson as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, notable return on equity, expanding profit margins, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the automotive industry could consider Consumer Discretionary Sel Sec SPDR ( XLY) while those bearish on the automotive industry could consider ProShares Ultra Sht Consumer Goods ( SZK).

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