Aegis Value Fund on Harley-Davidson, Inc.
Thesis
Aegis purchased Harley-Davidson at multi-year lows and at a price well below book value. The fund believes the company has a valuable century-old American brand but needs operational repair under its new management team. The 'Back to the Bricks' turnaround is intended to rebuild dealer relationships and broaden the entry-level motorcycle offering to attract a new generation of riders. The investment is a deep-value turnaround where improved execution could unlock value from a depressed starting valuation.
“we bought into a century-old American brand at multi-year low levels well below book value”
Key risks
- Execution risk in the 'Back to the Bricks' turnaround
- Failure to attract a new generation of riders