Polaris Industries Inc. (PII): Should You Invest in This Small Vehicle Maker?

Aixam Mega acquisition – In April, Polaris purchased France-based Aixam Mega, which makes mini trucks and cars, thereby adding to its product diversity. The acquisition gave Polaris larger access to European markets, adding to its geographic diversity.

Commercial markets – Polaris Industries Inc. (NYSE:PII)’ Brutus looks promising in the commercial market. This product looks like a small truck and allows for added attachments such as a snow scraper.

Threats

Competition – Arctic Cat boosted its ATV and side by side sales 32% last year, exceeding the 5% growth rate of its flagship snowmobile products. This increase in ATV sales contributed to a 15% overall boost in Arctic Cat’s revenue and indicates a wider diversification on its part. This gives indication of Polaris’ intensifying competition in that space and partially explains why Polaris’ leadership wants to expand its product and geographic base.

No doubt, Polaris’ reintroduction of the Indian Motorcycle brand captured the attention of Harley-Davidson, which will most likely cause it to step up its product design to match Indian.

Conclusion

As you can see, Polaris Industries Inc. (NYSE:PII)’ strong product line, coupled with multiple product and geographic opportunities, should serve shareholders well. While it may never lead in the heavy weight motorcycle segment, the iconic Indian name should prove a boon to the company’s bottom line. Its commercial products, such as the Brutus, should appeal to the commercial market as businesses boost capital spending in this recovering economy. The acquisition of Aixam Mega will give Polaris greater access to the European markets, enabling it to capitalize on any recovery there. This company definitely warrants more of your research time.

The article Should You Invest in This Small Vehicle Maker? originally appeared on Fool.com and is written by William Bias.

William Bias has no position in any stocks mentioned. The Motley Fool recommends Polaris Industries. The Motley Fool owns shares of Arctic Cat. William is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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