Harley-Davidson, Inc. (HOG), The Coca-Cola Company (KO): It’s Time To Buy This Iconic American Stock

Since the third quarter of 2011, the company has averaged quarterly motorcycle sales growth of 6.4%, and its stock has surged more than 150% since its $10 low in 2009.

	Harley’s average rider is no longer the young rebel of yesteryear.

A major bullish signal was provided by William von Mueffling’s hedge fund, Cantillon Capital Management, which recently purchased about 3.5 million shares for more than $190 million. This makes Harley-Davidson, Inc. (NYSE:HOG) 6% of the fund’s total holdings. Before to this quarter, Cantillon owned zero percent of the company. That’s a huge vote of confidence.

The technical picture indicates a sharp uptrend from June 24 to July 25, when shares hit nearly $60. The stock has since fallen, finding support at $55.

Risks to Consider: Harley’s prime competitor is Japan-based Honda Motor Co Ltd (ADR) (NYSE:HMC). The dollar-to-yen exchange rate is critical when evaluating the competition. A stronger greenback hurts Honda Motor Co Ltd (ADR) (NYSE:HMC) but could help Harley reduce its international import costs. Other competitive pressures include Polaris, which now owns Indian Motorcycle, the second-oldest American motorcycle manufacturer. While not commonly known for motorcycles, Polaris’ newly acquired Indian division — which is expected to soon start selling motorcycles bearing the Indian brand for the first time since 1953 — may take some fire away from Harley Davidson. In addition, motorcycle sales in general are closely tied to the economy.

Action to Take –> I like this stock right now. The momentum from the solid second quarter, combined with the company’s restructuring efforts and improving U.S. economy, should push shares to $65 within 12 months.

P.S. — With powerful brand loyalty and gains of more than 150% in the past four years, a stock like Harley-Davidson has similarities to a special group of securities we call “Forever Stocks.” These are companies whose competitive advantages are strong enough to make their stocks solid enough to buy, forget about and hold “Forever.” To learn more about these stocks — including some of their names and ticker symbols — click here.

– David Goodboy

The article It’s Time To Buy This Iconic American Stock originally appeared on StreetAuthority and is written by David Goodboy.

David Goodboy does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC does not hold positions in any securities mentioned in this article.