Harley Investment Analysis Luxury Goods Marine Max First Flight Toyota Tiffany’s
Why this Industry? In this troubling economy, this industry will flourish. The upper class will always have money to spend. Let’s analyze leading luxury firms so we can invest smart and join them.
Volume: measured by sales revenue • Toyota is biggest by far. • They also have the highest Net Income at $17 billion. • This volume gives Toyota several strengths: • Money to buy competitors • Develop new technology • Economies of scale • Promote • Success makes borrowing easy $262 billion
Growth: Measured By Sales Increase Growth From 05-07 Toyota Even though Toyota grew only 47% compared to First Flight Inc.’s 200%, Toyota’s dollar amount growth from 05 to 07 was close to 85 Billion dollars. We think that the last three years for Toyota reflect it’s future success because of the niche product they provide in Hybrid Technology. This growth and continued success is an indication of Toyota’s superior management prowess. This growth means they will continue to enjoy the benefits of their volume long into the future. Percent Growth 47% 200% Growth From 05-07 83Billion Billions
Value: Measured By P/E Ratio • P/E ratio is the price of the stock to the earnings per share ratio – the price to buy one Dollar of the company’s earnings High P/E ratio: The company is expected to make strong profits in the future so the high price is justified. Low P/E ratio: The company is expected to not prosper and so it is cheap to own but still probably not a good buy. A bit scary Overpriced Value If other investors are right. If other investors are wrong • High P/E ratio The price is higher than justified by the company’s earnings potential. The stock is not worth the price. • Low P/E ratio: Other investors are not acting on rational investment analysis. A Strong company is cheap and represents a buying opportunity.
Toyota is The Best! Growth! Value! Size!