In the context of the new tranche of Share Buy Back that Harley-Davidson is embarked upon, and especially in the context of the $750 million of medium and long-term debt the company has incurred to fund the scheme, the "steady-as-you-are" September 1st third quarter dividend announcement (maintaining the 2015 $0.31 per share of common stock) is significant.
In the context of the moribund share price travails Harley is enduring and the lukewarm to non-existent reaction to their August MY2016 announcement, the murmurings of investment community concern could well start to grow this winter, and the dangers of hostile mergers and acquisitions activity, especially from equity raiders, could well start to become public soon.
The current rolling 12-month high for Harley's share price came on December 5th 2014 at $70.15, putting it back within touching distance (in percentage terms) of its historic pre and post recession highs of $74.93 on November 24th 2006 and $72.68 on May 2nd 2014.
However, its 12-month low of $53.21 on August 25th 2015 and current, at time-of-press (September 15th) level of $54.99, sees a return to levels not seen since June 2013 (June 21st 2013 saw it drop to as low as $50.54) - prior to the MY 2014 project Rushmore announcements in August 2013.
‘25 percent market-cap loss in nine months’
With annual/quarterly fiscals and (now) two model-year announcements having come and gone in that time, and the seemingly well-timed retirement of Keith (Rescue King) Wandell earlier this year, the charitable in the market are deducing that Harley must be headed towards some dramatic model range or strategic news soon.
If they are, they are certainly coming at it off of a "long run", and the less charitable are concerned that even if that cupboard isn't exactly bare as such, the time is being spent better by Polaris, now emerging as their most serious rival, than by Milwaukee.
The effective loss of some 25 percent of market capitalization in just nine months (for that is what the numbers show) can't just be put down to stock market jitters (China induced or otherwise) or correction of overvalue.
That the US stock exchanges are massively overvaluing stocks is not in doubt, that correction-risk lurks around every corner is a real fear at this time.
However, in the context of growing motorcycle sales and a theoretically strong and continuing return of consumer confidence, Harley's current share price performance is clearly measuring something else as well, or instead.
There is clearly some investor community sentiment at play here, and the board clearly know that. The decision to incur debt to fund more share buy backs (while previous initiatives had not yet been fully utilized) and the failure to capitalize on Project Rushmore while Indian Motorcycle starts to emerge as a real competitor clearly must have Harley and its investors worried?
The stock market reaction to the MY2016 announcement and share buy back scheme hasn't been negative as such, yet, but neither has it been an overwhelming vote of confidence.