The stock market share prices for Harley Davidson for the last one month have been as shown in the table below.
From the table above, it can be deduced that the share prices for the company are relatively stable. The fluctuations can come about due to various reasons such as availability of competition, negative reputation at some time. The highest price for the period was indicated on 25th and 26th April 2018 at 42.88 USD (Dow Jones par. 1-5). The lowest was reported on 3rd of May 2018. The general outlook is that the stock prices were relatively high in April compared to May. The company could work on understanding the impacts of various economic aspects on their practices and stock market performance.
Price Earnings Ratio
The price earnings ratio for any given company is the ratio of the share price to the earnings per share. PE ratio therefore indicates the willingness of investors to pay a certain percentage of the earnings per share as the share price. Most investors would prefer to purchase shares with a low PE ratio than one with a high PE ratio since it is an indication of profitability. For Harley Davidson, the PE for the period ending May 2018 was reported to be 13.90 as at May 15th 2018 (Dow Jones, par. 4). This means that those who invest in the Harley Davidson are willing to pay 13.90 times as much as they would earn from their shares. In most cases, stocks with high PE are those projected to perform better in the future. This can be based on the historical earnings for the shares, the projected earnings or the rolling earnings for the shares. Where the PE is unusually high, it can also be an indication of a bubble, which would ultimately burst. It is the obligation of intending share holders to conduct due diligence and hence determine the probability of profitability based on historical data.
Currently, the dividend rate for Harley Davidson is set at $ 0.37.
Net Income for the Period Reported
For the reported period, the net income growth was reported to be -24.62%. The total revenue from the last quarter was reported to be $ 5.65 billion.
Solving the Problems at Harley Davidson
Despite the financial performance at Harley Davidson, there are various challenges that the company still faces and which it applies different strategies in addressing. The issues are as follows:
Name: Harley Davidson Inc. deals with the manufacture, sale and distribution of motorcycles for cruise, touring and custom made products. To differentiate the company products from other manufacturer, Harley Davidson decided to name their newest motor cycles the P4 “digger”, which reflects with the distinctive sound it makes.
Frame: Harley Davidson Inc wanted their products to have distinctive stability, speed, strength and look. The differently styled motor cycles are marketed based on their aggressive, long, minimal, and low frame, which makes them easy to manipulate yet powerful at the same time. The engine is also enhanced to what looks somewhat like a turbo engine, with an elegantly curved double rail, which deviates from the traditional rails characteristic of other motor cycles. The single rail like the ones in conventional motor cycles is well hidden by the gas tank and accommodates sufficient horse power. The powerful P4 could have had the two rails running along the bike side as a rail, but the company decided to use an alternative design for improved robustness and versatility. Needless to say, Harley Davidson’s p4 satisfies the needs of multi use characteristics in different bike riding requirements.
Engine: The P4 is characterized by a turbo like VR 100 race engine, which makes the bikes effective in diverse terrain environments. The race engine is liquid cooled, contrary to the conventional air cooled engines in other bikes. While the company attempted to fit the engine within the frames, the design of the bike made it impossible to achieve that. Nonetheless, the level of power and efficiency associated with the engine warrants its consideration in the engine design.
Radiator Problem: In conventional bike designs, the radiator is often air cooled due to the open air nature of the engine. However, the Harley Davidson’s P4 faced significant challenges in cooling as a result of the double rail enclosure for the bike frame. The engineers initially made a clay model for what they wanted, which would take the cooling fluid directly to the radiators. Other suggestions revolved around increasing the radiator size to increase heating time and to increase the surface area for efficient cooling. The initial suggestions however resulted in an impractical bike model that would perform below the design expectations. The company alter settled for the cooling liquid dependent radiator.
Dow Jones. Harley Davidson Inc. The Wall Street Journal, 2018. Retrieved from quotes.wsj.com/HOG