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Monday, November 15, 2010

Time to turn the key to the off position: Harley Davidson

While stocks almost across the board
have been on a roll lately, the momentum
can't keep up forever. There are several stocks
out there that I think are overextended
and ready to take a hit.

Investopedia Staff
Time to Turn the Key to the Off Position

Harley Davidson (NYSE:HOG) makes motorcycles are well engineered and pleasing to the eye, and long-term this company has the potential to do well in terms of earnings. But right now there are several factors that make investor's less optimistic in the short term.

First, higher interest rates are a likelihood at some point. Second, fuel prices are rising and this is likely to have an impact on consumer spending. Third, home prices are likely to remain in the doldrums due to the high unemployment rate. And that can be a problem because would-be riders could have a tough time borrowing against their abodes.

Of course, not everyone shares in the belief that the stock is overextended. However, those macroeconomic concerns should be noted when considering this stock for your portfolio.

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