Enduring Brand Name - Long Term Competitive Advantage - HDI
A durable, competitive advantage.
That's the concept that's discussed so nicely in Mary Buffett's second book about Uber-investor Warren Buffett, "The New Buffettology".
The bulk of Warren Buffett's fortune was made on a handful of trades. The companies he bought had been killed on the stock price, but were all familiar companies that had a durable, competitve advantage.
Why does it have to be durable? Because you want to hold the stock for years to make the big money.
What is the advantage? With many companies it can be their brand name. Would you rather have the Coca Cola brand or would you rather start your own soft drink company?
Buying stocks in the truly iconic American brands, if done at the right time, can result in huge long term profits.
Does Harley Davidson have a durable, competitive advantage? I'd say they do indeed. They can and do raise prices ahead of inflation. They will always be able to price higher to improve margins. This means they always have great free cash flow so they can re-invest in research and design.
If you know people who have Harley's, you know that the relationship with that product is more intense than with almost any other.
This one is definitely good for a Buy and Holder's portfolio.
HDI is about $48 right now, what would be a target price to buy?
If you check out their [url=http://finance.yahoo.com/q/bc?s=HDI&t=2y&l=on&z=m&q=l&c=]2 year chart[/url] , this might not be a bad time to buy.
They're at around a 20 P/E so nothing to outlandish.
If you are putting away money weekly this might be one to add. You can also probably enroll in their DRIP if you buy one share. Looks like they hit $35 for a brief moment earlier this year so they are up a bit.
