Thursday, May 03, 2007

A Play on High Gas Prices? Motorcycle Stocks

Many Americans are turning to motorcycles as alternatives to their SUV's and large sedans, due to the high price of gasoline. Could it be that motorcycle stocks are a play on high gas prices? Are motorcycles considered a green vehicle? Here are a few stocks for your review to see if they are worth taking a ride on:

Ducati Motor Holding S.p.A. (DMH) This Italian based company has been around since 1906. Their brands include Superbike, Super Sport, Sport Naked, Sport Touring, Multistrada, and Sport Classic. They have had negative earnings, but a forward P/E of 208, with a price sales ratio of 1.5.

Harley-Davidson, Inc. (HOG) A classic company founded in 1903, the largest American manufacturer of motorcycles. Last year, the company was fortunate enough to change their NYSE stock symbol from HDI to HOG, a nickname for the Harley motorcycles. [Trivia: the term HOG comes from the fact that in the 1920's in the South, Harley motorcycle racers had a pig or hog as a mascot. Then in 1983, the Harley Owners Group was set up using the HOG acronym.] Their P/E is 16.5, the PEG is 1.4, and it pays a yield of 1.6%.

Honda Motor Co. Ltd. (HMC) This company is obviously not a pure play, since its primary business is manufacturing automobiles. In addition, they also make trucks, scooters, robots, jets, ATVs, boats, generators, engines, and garden equipment. They have a forward P/E of 10.5, a PEG of 1.2, with a yield of .4%.

Polaris Industries Inc. (PII) This company owns Victory Motorcycles. They also manufacture ATVs and snowmobiles. Their motorcycle brands include Victory Vegas, Kingpin, Kingpin Tour, Hammer, Hammer S, Eight Ball, and Vegas Jackpot. They have a P/E of 19.2, a PEG of 1.3, and a decent yield of 2.7%.

There are also a few extremely speculative microcap motorcycle stocks including Bad Toys Holdings, Inc [BTYH.OB], Patriot Motorcycle Corporation [PMCY.PK], and Ultra Motorcycle Inc. [UMCC.PK]

The larger cap stocks can be tracked at Stockpickr.com.

Author owns HOG and DHM.

2 comments:

ckh123 said...

Please don't suggest that a motorcycle could ever be a "green" alternative. The cleanest motorcycle is 100 times more polluting than a Toyota Prius and 20 to 90 times more polluting than the average new car. I have had Harleys for 32 years and I am continually disappointed with the emission problem. They could do better but they are not required to. The EPA has far lower standards for motorcycles than autos due to their low usage (.3% to .6%) compared to oall other forms of transportation. One of the worst combinations for pollution is an air cooled, high performance, carburetted engine. Anything with a carburetor wastes more unburned fuel out the exhaust than any fuel injected engine due to its inability to properly atomize and balance fuel/air mix to an ideal ratio (14.7 to 1). Catalytic convertors work best at around 900+ degrees and a motorcycle rarely gets there if ever. Harley and others have had a few good investment moments in the past but it is not a "green" machine.

ckh123 said...

My Pontiac Vibe gets 37 mpg highway, carries five people and runs much better in the rain and snow than my Harley which gets 45 mpg. It's not worth the difference.