Harley-Davidson Is Still a Good Ride

NEW YORK (Real Money) -- Investors have experienced a wipe-out in Harley-Davidson's (HOG) shares during the past 12 months as the stock has crashed more than 27% to a recent low of $53.36. 

Management has done an excellent job building the brand, upgrading the product lines, running the plants more efficiently and expanding global distribution. Unfortunately, the rapid decline of -20% in both the Yen and Euro currencies during this time frame unleased macro competitive pressures that swamped the positive corporate strategies Harley has been pursuing.

Due to these strengths, the company has been consistently and highly profitable with 36% gross margins, 18% operating margins, a 12%+ return on assets and a 25%+ return on equity. All of its earnings have also been converted into free cash flow through the years. The free cash flow has been completely returned to shareholders via dividends and share buybacks.

Editor's Note: This article was originally published at 2:30 p.m. EDT on Real Money on June 3, 2015.

At the time of publication Matrix clients and Katz owned shares in Harley-Davidson.

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