High on the HOG
05/03/2016 7:00 am EST
When Warren Buffett sits at his desk and plans to consider what his next big purchase is going to be, we know one thing at least, he likes brands. Indeed, it could be possible he would like our latest recommendation, notes value investor Russ Kaplan, editor of Heartland Advisor.
Harley Davidson (HOG) has a group of devoted customers. When they think of motorcycles they think of Harley Davidson and this is the only brand of motorcycle they consider.
Mr. Buffet likes to refer to brands with devout, avid consumer bases as a stocks with a "moat".
There are very few companies on the exchanges that can claim the fervor surrounding their brand that Harley Davidson has.
Harley Davidson was founded in 1903 when automotive technology was far different and it continued to be an industry leader when it comes to technological change.
The CEO of this company Keith Wandell owns almost 147,000 shares indicating he operates on a definite long term perspective when it comes to business dealings.
It is a solid financial company trading at a suppressed recent price of $47/share. That, from a high of $74/share in 2014, makes it a ripe opportunity for purchase profit.
It has slumped due to a bad quarter that frenzied the Wall Street insiders. However, we can see HOG meeting and exceeding that price.
Harley Davidson pays a dividend of 2.75% (raised three times in the last three years) and probably will be raised again. It is a safe investment and you won't get anything near this with most bonds.
By Russ Kaplan, Editor of Heartland Advisor
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