Wednesday, September 16, 2009

Excellent performance at Polaris (PII)




AlphaNinja - I'm almost blushing I'm so impressed. Polaris Industries (PII) is executing BEAUTIFULLY amidst a horrible environment.

The company sells snowmobiles, ATV's and other (mostly) recreational vehicles. Expensive toys like these would be among the most discretionary purchases that people would forgo in tough economic times, but the company has performed admirably. They are confirming guidance for the full year and released a slideshow (they're presenting at conferences, so to be in compliance with SEC rules must let all shareholders know about what's being said).

The slide below shows big drops in sales, but also nice improvements in gross margin %.






The shares are up 10% this morning, I'd say mostly due to investor surprise that full year guidance remains intact. These guys peddle an expensive, very discretionary purchase, and it wasn't even supported by the cash-for-clunkers program.

Also boosting shares is a Wedbush Morgan upgrade. The analyst raised the rating to Outperform, and took their target from $34 to $47, as they see inventories stabilizing and promotional pricing easing. The stock, at a PE of under 14, is inexpensive given the great performance gains that should become even more apparent in an economic rebound.

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