Harley-Davidson, Inc. (HOG) Purchased on 2/8/2016

From 2009 to 2014, earnings at Harley-Davidson, Inc. (HOG) experienced rapid growth, and its stock price was overvalued for most of the time.  When profits looked like they might fall a little, the price fell a lot over a period of about two years.

One of the things that I have learned over the past few years while I have been studying dividend growth investing is that the market price of a stock is not always in line with earnings.  If you wait long enough, odds are that you will eventually find a price close to fair value, and there is a good chance that the price will drop into undervalued territory.

And that is what happened to HOG at just the time when I had $500 ready to invest in something.  In hindsight, we can clearly see that the market overreacted to HOG's profit decline, and the price of the stock has since moved closer in line with the performance of the business.

The orange line on the F.A.S.T. Graph seems to indicate that profits are expected to rise for the next few years, so HOG may be a great investment over that time frame. For now, I intend to hold HOG in my "nonPension" portfolio.

When I purchased, HOG last February, the company had just announced a dividend increase, so there  has not been an increase announcement in the 11 months I have owned the stock.  Perhaps we will see a nice raise in a few weeks.  Until then, I will appreciate the nice price appreciation.