Plus their Indian motorcycle line grew 154% from the 2014 quarter to the 2015 quarter from $60 million to $160 million, an incremental $100 million in sales in one year. Incredible growth and certainly not something you sell.
Gross margin in 2014 was 29.8%. In 2015 it fell to 28.5%; however, when currency adjustments i.e. one-timers are taken out, the gross margin would have been 30.4%. That's an increase in gross margin of 60 basis points. This stock should have never sold off like it did. It was actually an excellent report with EXPANDING margins. $125-130 very soon.
This reaction after earnings is laughable, but I'm so thankful it occurred. A 0.5% reduction in revenue growth only requires a 1.9% reduction in the price of the stock in a DCF model. There was a MAJOR washout yesterday with the stock trading almost 10% of the market cap in one day. All that's left is for the 15% short interest to cover. Sellers are done. This one's a coiled spring. See you at $125-130 in a month.
I'll contend the ONLY reason we sold off today is the fear that Ted Cruz will filibuster the CR tonight. That's all. It won't happen and this sell-off will be a distant memory tomorrow.
And just to show I'm honest unlike all these other people, if Cruz does filibuster the CR, then the market is going A LOT lower.
Here's the truth. The market fears that a conservative Republican will filibuster the vote tonight. The market sold off in case there was a surprise event. When that risk does not materialize tomorrow, the V-shaped bounce occurs. Remember, China was a mixed bag last night, but there was no dramatic sell-off. Today was not about China....total canard. I'm surprised how poorly people read the markets moves. You always have to sell to discount risks. That is the last risk to the government funding issue.....a surprise filibuster. It's not happening.
So it's not smart to believe fewer risks to worry about means the market will go up should be a thought we preclude because we run the precious risk of being perceived as a cheer leader LOL
You are right nothing changed. Lot's off critical risks coming off this week and we tested the August closing low. Massive reversal coming.
How can so many people not see this is set-up for a monster move to the upside tomorrow? Right now no one knows if the government will be funded at the deadline, but after these votes are cast, we get the certainty that we don't have to fear the shutdown. Why would the market continue to selloff when a negative risk factor comes off. Makes no sense. We've known China is slowing for well over a month. After we get these votes we can start the bull run into the end of year that almost always happens. The call options for Wednesday expiration traded significantly above their open interest for almost every strike from $190-196. The puts did not, it was a mixed bag at best. This means traders were opening new positions in calls, and closing positions in puts.
Scoff all you want, but we are set-up for a massive reversal tomorrow and Wednesday as the shutdown risk is taken off our trading radar. I'm in in the 188's so it's a perfect trading set-up, and obviously the options market agrees with me.
What happened today that's different from Friday. Nothing. But tomorrow the CR will have passed. So I'm leaning with a positive development for a trade. Getting in like I did in the 188's for a trade makes perfect sense.
I have no views on those :) What I do know is this selloff is not at all discounting a successful completion of the CR votes. It's going to bounce hard very soon, and probably into the close as a dose of sanity hits the market.
So the headlines say slowing growth in China is the cause of today's selloff. That's not true, because Shanghai was up.
When Boehner said he quit and basically saved the government from shutting down, the SPY bounced to 195. When the market opens tomorrow, the Senate will have passed the continuing resolution. This market selloff today is in no way shape or form discounting the successful passage of the continuing resolution. This market could bounce 50-100 handles easily on the S&P500 when the votes are successfully completed. This selloff today is a major mistake, and in a day or two this market will be 195-200 on the SPY. Total mistake. I've rarely seen the market get it so wrong.