Samurai_stockholder

2 Comments

    • Crocs: Bloated Inventory Caused Stock Slide [view article]
      If you've ever been a brand manager for a large company, you'd know that it is impossible to forecast a mega-hit product.

      CROX has over 250 SKUs. If they were to build pre-launch inventory under the assumption that every new product would be a mega-hit, then they actually would have an inventory problem.

      In actuality, their inventory as a percentage of forecast sales is well within industry standards of around 16%.

      You and the analysts are simply wrong on this one.

      The reason CROX is down has nothing to do with growing inventory to meet phenomenal sales growth (+139% YOY) it is solely due to its 30% of float being short.

      Why didn't you mention that little fact?

      This will soon change when the hedge funds cover their short positions--probably the first week of March.

      After the short squeeze, see how concerned the market seems to be about an "inventory problem"....
      Mar 01 10:47 AM
    • Crocs: On the Down Escalator [view article]
      In addition to your in depth and highly original stock analysis, "what goes up must come down", did you happen to dig just a little bit deeper and notice the predatory short interest in the stock?

      Had you dug deeper you would have found that CROX is literally the cheapest stock in the entire market in terms of value:

      PE: 9
      PEG: 0.257
      ROE: 50.6%
      ROA: 35.9% about twice industry average.
      Debt: zero
      Forward EPS growth: 35%
      Net Margins: 20% (highest in industry)
      YOY sales growth: 139%
      YOY earnings growth: 143%

      **If you plug just the first 6 parameters in a stock screening program, CROX is the only company out of 11,286 companies in the entire market that remains....

      If you dug even deeper you might find that CROX's short interest is over 30% of its float.

      Now, look at its financial results then look at the short interest. Which do think is the cause of CROX's fall in share price?

      Inventories are growing because sales are growing at 139% YOY. Current inventory as a percentage of projected sales is 16% which is actually lower than the industry average.

      Regarding "missing earnings", analysts just prior to the announcement increased their projections. It's always difficult hitting a moving target.... CROX actually exceeded their '07 guidance.

      It's predatory shorting that caused this fall and nothing else. It's a small float company so it was wreckable and the hedge funds wrecked it.

      Rather than spending time coming up with a pithy title for your article, you might have done some real research and then suggested to your readers that CROX is an incredible buy at these prices and is set up for a short squeeze, which it is.

      Why post something meaningless like you did? Why not show your readers what a great buy you found?

      They'll thank and appreciate you more for it.

      I challenge you to write a follow up article once the "escalator" starts going up next week.

      Something along the lines that hedge funds can sometimes make big mistakes when over shorting a strong and growing company.




      Mar 01 10:13 AM
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