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Why Now's a Bad Time to Take a Spin with Harley-Davidson

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Hopefully it will come back with a vengeance -- but that won't be anytime soon.

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While most people spent the Sunday parked in front of the television watching football, a good part of my day was spent at the mall, and more specifically, the Build-A-Bear Workshop. Long story (don't ask), but my kids are happy and that's all that matters.

Asian stocks took a bit of a hit overnight. The Hang Seng and the Nikkei were off 0.62% and 0.74% respectively. European stocks were a bit of a mixed bag early this morning. And here in the US, we're currently trading higher.

Here's what I'm seeing this morning:

Harley-Davidson
(HOG):
This is not a great time to take a spin. Check out the bike maker's fourth-quarter numbers.

Its loss from continuing ops came in at $0.63. Not too swell in that the Street had been at a loss of $0.32. Not surprisingly, the stock got some road rash (with the rest of the market) in Friday's session on some heavy volume.

Some thoughts:

1. I love the designs of most of its bikes and this is a company that I really want to see come back with a vengeance. But my wallet thinks that the demand for pricey bikes is going to remain lackluster for a while. I won't be bellying up anytime soon.

2. The outlook it gave (for 2010) in its release wasn't all that inspiring. These few lines in the release caught my eye: "For 2010, the Company expects to ship 201,000 to 212,000 Harley-Davidson motorcycles to dealers and distributors worldwide, a reduction of five to ten percent from 2009...We believe 2010 will continue to be a challenging year."

3. In addition to a better outlook for the high-end bike market, I think the company needs to put up a few quarters of it beating Street expectations in order to win back the average investor.

General Electric (GE):
Was anyone even paying attention? On Friday the chatter about its numbers was pretty minimal, but I think they warrant a peek.

The conglomerate that "brings good things to life" turned in $0.28, which was two cents north of expectations. It beat on the top line, too.

Some thoughts:

1. I continue to think there's upside potential here. I see lots of room for growth on the earnings front over the next several years as this economy continues its slow-but-sure comeback. I also want to point out that it has a pile of cash and marketable securities on its balance sheet that I wouldn't mind having on mine, and it kicks out a nice dividend.

2. Let's not forget that excellent insider purchase in the mid teens back in October. That caught my eye in a big way.

3. I'm excited about the stock and think it could have some legs from the mid-teens.

Abercrombie & Fitch (ANF):
Per Justin Sharon, Brean Murray bumped it up to Hold.

I'm still not feeling anything here, and even though the recent pullback in the share price has raised my eyebrows, I still have no plans to bottom fish. Given the earnings outlook, I'd like to see something in the low $20s before I consider bellying up. Of course, if you read this column consistently then you know I've been a bear for quite a while. For my last take on the company, see Abercrombie's Shares Not as Eye-Catching as Ads.

Ciena (CIEN):
Auriga slapped a Buy rating on the company.

The shares have certainly gotten a lift since the new year, and existing shareholders have to be happy about the Auriga note. But with ample red ink expected this year, I think there are better opportunities out there. Although to be perfectly fair, there was some insider nibbling in the double-digits, so maybe I'll be proven wrong.

For my last take on Ciena, click here.

Have a great day!
No positions in stocks mentioned.

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