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  • Friday's Options Recap [View article]
    HOG just ran up after a good sized miss. The implied volatility is likely down due to the topping out process. It should be aobut ready to head downward again. After the miss, it is now trading at 53 times 2009 estimated earnings (with only one quarter left to report). If you take into account HOG has missed for 5 consecutive quarters, then the FY2009 PE may well be in the 60's or higher. Does a company that is supposed to lose money next quarter deserve to trade at a 50+ FY2009 PE? Unemployment is still rising. The credit card charge off rates are going up even faster. HOG's auto loan problems have to increase along with these other rates. HOG is likely to have worsening problems next year, not improving results. Moody's has predicted the charge of rate peak to be in the middle of 2010. When bike's are repo'd in this environment, they have much lower value than normal. The losses for repo's are higher. With more defaulting loans and higher losses on those defaults, does anyone believe that HOG will grow earnings next year?
    Oct 16 21:01 pm |Rating: +1 0 |Link to Comment
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