Crocs: Cheap Retailer Heading Higher

| About: Crocs, Inc. (CROX)
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I sold puts against Crocs (NASDAQ:CROX) late in the third quarter and happily took possession of the shares when those options expired in January. This cheap retailer has started to head higher in the last couple of weeks. It has picked up some recent positive catalysts and I think the shares are heading even higher.

Positive recent catalysts for CROX:

  • Famed value investor Leon Cooperman just disclosed picking up a significant stake.
  • Zacks listed the shares as a "Buy" in late January saying the company consistently beats earnings estimates. The company reports earnings next on February 18th.
  • Barron's also had a positive piece on the company and its stock around the same time.

Crocs, Inc. provides footwear, apparel and accessories for men, women, and children in the Americas, Europe and Asia.

4 reasons CROX has upside at $15 a share:

  1. Analysts expect low double digit revenue growth in FY2013, just slightly above 2012's sales increase. It has a five year projected PEG near 1 (1.18).
  2. Crocs has a solid balance sheet with over $300mm in net cash on its books (over 20% of current market capitalization at current prices).
  3. The mean price target by the 9 analysts who cover the stock is north of $19 a share.
  4. The stock is priced under 10x forward earnings, a substantial discount to its five year average (17.4).

Disclosure: I am long CROX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.