Harley-Davidson, Inc.

Harley-Davidson, Inc. (NYSE: HOG) manufactures and sells motorbikes through a network of independent dealers and e-commerce channels in the United States, Canada, Europe, Asia Pacific, and Latin America. It sells custom, cruiser, and touring bikes, as well as Harley-Davidson motorcycle parts, accessories, riding gear, and apparel, and other allied products.

Key Highlights

• The company reported a 36.57% rise in total revenue to USD 2.95 billion during 6MFY21 (ended June 27, 2021) compared to USD 2.16 billion during 6MFY20 (ended June 28, 2020).
• As of June 27, 2021, the company had cash and cash equivalents of USD 1.74 billion and total debt of USD 7.08 billion.
• HOG's cash conversion cycle is exceptionally long, at 226 days in FY20, compared to the industry median of 62 days.
• On July 21, 2021, HOG introduced the brand-new H-D1 marketplace on H-D.com, offering customers a centralized location to search, sell, and buy used Harley-Davidson bikes in North America.
• Stock is currently trading between its crucial short-term (50-day) and long-term (200-day) SMA support levels.
• Stock is currently leaning towards the higher band of the 52-week range of USD 22.56 to USD 52.06.
• HOG's stock price has risen 47.14% in the past twelve months, compared to 9.47% for the S&P 500 index.

Technical Price Chart (as of August 16, 2021). Analysis by Kalkine

Conclusion: Considering the significant uptick in the stock price, we feel the current share price adequately reflects the decent business fundamentals and have chosen to remain on the sidelines. Hence, we recommend an "Expensive" rating on the stock at the closing price of USD 41.14, up 0.59% as of August 16, 2021.

*The reference data in this report has been partly sourced from REFINITIV.

Cavco Industries, Inc.

Cavco Industries, Inc. (NASDAQ: CVCO) designs and manufactures factory-built homes, primarily distributed through a network of independent and company-owned retailers, planned community operators and residential developers.

Key Highlights

• The company reported YoY growth of 29.68% in net revenue to USD 330.42 million in Q1FY22 (ended July 03, 2021) compared to USD 254.80 million in Q1FY21 (ended June 27, 2020).
• Net income for Q1FY22 increased by 62.20% to USD 27.05 million from USD 16.67 million in Q1FY21.
• On August 09, 2021, CVCO announced the appointment of Allison K. Aden as Executive VP and CFO, effective August 30, 2021.
• On July 26, 2021, CVCO agreed to acquire The Commodore Corporation, a US-based homebuilder, for a total cash consideration of USD 153 million.
• CVCO’s EBITDA margin for Q1FY22 was 10.5%, lower than the industry median of 15.2%.
• Its Debt/Equity ratio as of Q1FY22 was 0.02x, whereas the peer median stood at 0.45x.
• Relatively low ROE of 3.9% in Q1FY22 vs. industry median of 5.1%.
• Stock is currently trading above its crucial short-term as well as long-term 50-day and 200-day SMA support levels, a bearish indicator.
• Stock is currently leaning towards the higher end of the 52-week range of USD 162.88 to USD 261.28.
• CVCO’s share price has increased 15.74% and 31.13% in the past six and nine months, respectively.

Technical Price Chart (as of August 16, 2021). Analysis by Kalkine

Conclusion: Considering the significant uptick in the stock price, we feel the current share price adequately reflects the robust business fundamentals and have chosen to remain on the sidelines. Hence, we recommend an “Expensive” rating on the stock at the closing price of USD 260.65, up 2.41% as of August 16, 2021.

*The reference data in this report has been partly sourced from REFINITIV.