Despite HOG’s recognition and identification of the issues at hand, I believe the execution of its new strategy is fatally flawed, despite certainly being an improvement at a higher-level. As a result, I think shares should re-rate significantly to the downside in the coming months, and potentially permanently given HOG’s current dependence on share repurchases, high leverage of 6.2x, credit risk from its lending segment, a 2018 dividend payout ratio of 46.33%, and for the first time ever, an-almost negative quarterly net income print of $0.5M in 4Q18. Keep in mind, this is all in the backdrop of what is arguably the 8th + inning of the bull market and economic cycle, and HOG saw no mercy during the last recession, bottoming out at 4.41x forward TEV/EBITDA in November of 2008 with net debt to LTM EBITDA of only 2.8x.
Thoughts?
Submitted February 23, 2019 at 06:18PM by bennybuckets1392 https://ift.tt/2BN6agI
