Polaris Industries, Inc. (NYSE:PII)

CAPS Rating: 5 out of 5

Designs, engineers and manufactures all terrain vehicles, snowmobiles, and motorcycles and markets them, together with related replacement parts, garments and accessories through dealers and distributors located in the United States, Canada and Europe.


Player Avatar TMFInnovator (42.90) Submitted: 6/4/2013 8:01:08 PM : Outperform Start Price: $93.29 PII Score: +32.60

Why oh why did I never put this in my portfolio?

Polaris is a constant reminder to me on why I should never 'anchor' on a stock's current price. PII has had a seat on my watchlist since Aug '11, when it traded at $50. Since then, the company has executed almost perfectly and the stock price rose accordingly, hitting many new 52-week highs over the next two years.

I don't think they're done yet.

- Even at $95, PII is trading at a respectable 18 times earnings.
- There are still plenty of drivers. The US DoD awarded a $382 million contract for Polaris 'fire and emergency vehicles' through 2018. Consumer spending also continues to recover, and additional discretionary income is good for recreational vehicle sales.
- The dividend has increased 121% in four years and is still just 37% of LTM's free cash flow.

Rather than continue to kick myself, I'm giving Polaris the CAPS green-thumb.

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