Why I'm Not High on Harley-Davidson

3/28 - "It would be one thing if earnings were growing 12% per year, as they have for the last five years. In that case, investors could expect 15% annual returns. But I don’t think the growth will be even close to that rate, or to the 11% consensus growth estimate."

"Taking a free cash flow approach to valuation, Harley generated $556 million in free cash flow in 2007, for a 6.2% yield against the current market cap. That’s a nice yield, but I’ve seen quite a few names with similar or higher yields and more attractive growth prospects. In order to generate a double-digit free cash flow yield, the price would have to drop to $23 a share."