Zachary Scheidt

Crocs: Value Building or Value Trap?

All good thoughts and I appreciate the lively commentary.

DJ, I have one thought for you. What if the company earns 3.00 in 2009 (below estimates) and simply trades at a 15 multiple. That is still $45 which is an exceptional return for the time period held. And it's not too far of a stretch to assume a 15 multiple on this type of growth.

Definitely one to keep an eye on.

Zach
zachstocks.com

Crocs' New Majority Shareholder

I know it hurts to hold the stock at 2/3 of its previous value. But I do think there is good value now at this level given the strong long-term growth prospects. Good luck with your position!

Crocs' New Majority Shareholder

If that is true it is a definite plus for the stock on US exchanges because a declining dollar will translate to higher dollar valued EPS from international sales.

Crocs' New Majority Shareholder

no - The point I was trying to make is that the investor psychology behind this name is now different as different shareholders now own the stock. Momentum players have moved on to the next big thing - the investors who hold the stock now are more concerned with valuation and the long-term fundamentals of the company.

Who is Crocs Trying to Fool?

Andrew - i'm curious of your time frame along with your analytics. Obviously in the long run the stock value will be determined by the economic value of the company. However today's move certainly had nothing to do with financial statements as those are unchanged from yesterday or even a week ago. nothing personal at all, i'm just curious how you incorporate fundamental analytics into what appears to be a shorter-term trading strategy?

Who is Crocs Trying to Fool?

guilty as charged... I sit here wearing my ugly Crocs, thinking about how much money i would have made if i hadn't hedged my long position with calls that took my stock away last month. I like the shoes (more of an indication of my poor taste than a rebuttle to your argument) and I actually like the stock. The swiss cheese shoes ARE a fad. The stock IS expensive. And the shorts MAY turn out to be right.

But the company has proven the ability to take an idea and mass market it with an impressive distribution system and turn it into a huge profit. If this were a company with sales growing 500% a year but no profit (think back to the 90's) it would be different, but the management seems to have a very good handle on their abilities and I wouldn't bet against them at this point. Who knows - maybe the back to school backpacks will take off driving EPS to $4.00 this year. Maybe they will start selling boats that complement their no-slip shoes (just kidding of course) - whatever the strategy, it will be interesting to see how the management adapts to changing consumer tastes.

I'm not long the stock. I'm not short. but if it comes back in some, and their product line is able to adapt well, I will probably try to step in and buy again... Why oh WHY did i sell those calls???