3SOF

Today I thought of initiating threads here for some popular stocks which I would like to follow more closely from now on.

CROX is a good one, with 10.8 million shares traded yesterday and results just out:

• Crocs reaffirms full-year guidance, shares climb after hours
AP (Wed 5:13pm)

Wow, the following is quite a spectacular chart:



I wonder what was the share count evolution since the IPO:



Interesting, there were no significant changes. So CROX market cap six months ago was $6.2 B and at yesterday's closing price it was $822 M

Yesterday's results and guidance came in more or less in line with analysts expectations. Management gave fully diluted EPS guidance of $1.59 for fiscal year 2008, so the stock closed yesterday at 6.3 times forward earnings (5 times trailing earnings).

I guess that after that huge fall and now that CROX is getting to the seasonally stronger period, at least a rebound towards the 50 days SMA (currently at $16.26, but trending down) is in the cards:



I'm not sure if things are comparable, but I see Adidas market cap at $13.5 B and valued at 14 times earnings and Nike with a $26.2 B market cap and valued at 18.5 times earnings. I also find CROX undervalued when compared to other companies in the same industry group, as DECK, for example.

Crocs international sales are growing very fast:

«Overseas, we experienced significant sales increases in Europe and Asia which were up 109.2% and 92.5% from the first quarter of last year, respectively;»

The market is valuing Crocs as if the company's products were just a one time show, a fashion that has come and gone, and certainly there's that risk.

What do you think?

My sense of fashion is poor, but as I look at the products offered at www.crocs.com, I believe their offering is diversified enough and products are cool It isn't easy to create a global brand and Crocs already achieved that.

You know what? I recommend buying CROX for the Main Portfolio around today's open.

Whether this is a short term trade or a long term investment it remains to be seen, as I'll update this analysis on a regular basis.

Another good comparison is with Geox, an Italian company. These shoes also went into fashion last year and the company started opening retail stores across Europe ... GEOX is now a $3.9 B market cap company and it is valued at 17 times earnings. GEOX sales were $1.1 B in 2007, compared to $847 M for CROX.

Horrible fundamentals right now, but I feel it worth mentioning I finally bought an actual pair of those SKNN shoes, I love them!  Certain sizes are apparetnly selling out new a week after I bought them at Sportie LA..I bought their stock, but not sure about the company having dilluted recently...   But hell, their concept is cooler than CROX in my opinion, and they have a patent...

Hope this CROX play works out for the main,  it does seem to have been beaten up too much.  I see lots of buying CROX on the YMBs...

stocks are pretty good at closing gaps so it would be nice if this one closed to gap to 18/share from its current price.

QuoteHorrible fundamentals right now, but I feel it worth mentioning I finally bought an actual pair of those SKNN shoes, I love them!  Certain sizes are apparetnly selling out new a week after I bought them at Sportie LA..I bought their stock, but not sure about the company having dilluted recently...    But hell, their concept is cooler than CROX in my opinion, and they have a patent...

Not so bad Tokyo, just $19 M market cap and as you say, there's an actual product which you like and by your testimonial it is selling well.

When I first looked at SKNN.OB, if I recall correctly, the market cap was over $100 M and sales were still a mirage. So, much more attractive now. Good luck

Oh boy, I hope some of you bought in the pre-market when the stock was $1 lower. It is up 25% from yesterday's close now.

You know I'll put the opening price on the Main, I hope it's not too high.

   Careful

AP
Ahead of the Bell: Analysts weigh in on Crocs, Zumiez
Thursday May 8, 8:28 am ET
JPMorgan cuts outlook on Crocs, Weisel raises estimates for Zumiez on retailers' results

NEW YORK (AP) -- A JPMorgan analyst cut his estimates on Crocs Inc. late Wednesday after the shoe maker posted lower-than-expected first-quarter results.

Robert Samuels cut his 2008 outlook to $1.68 per share from $1.70 per share in a note to investors, saying he was disappointed with the company's sales growth and decline in gross margins. He maintained his "Neutral" rating.

Analysts expect average earnings of $1.60 per share in 2008, according to Thomson Financial.

Separately, a Thomas Weisel analyst raised revenue estimates for Zumiez Inc. after the skateboard and snowboard products retailer posted better-than-expected April same-store sales.

Thomas Weisel analyst Jim Duffy raised his 2009 revenue outlook for the Everett, Wash., company to $437 million from $435 million in a note to investors late Wednesday, citing the better-than-expected figures, which measure performance at stores open at least a year.

But he pointed out that the results were skewed higher by an earlier-than-usual Easter, resulting in an additional weekend day of sales.

Analysts polled by Thomson Financial expect revenue of $441.3 million in 2009.

QuoteRobert Samuels cut his 2008 outlook to $1.68 per share from $1.70 per share in a note to investors, saying he was disappointed with the company's sales growth and decline in gross margins. He maintained his "Neutral" rating.

So, this bear on CROX has a $1.68 EPS estimate for 2008. At $12.5 the company is valued at just 7.4 times earnings. I believe investors were thinking CROX would lower guidance again when reporting 1st quarter results. It didn't happen.

My bet is CROX opens at $12.5 and closes above $14 today, up 40% plus.

But I can be wrong ... you be the judge of the reward/risk situation.

OK,I'm in at 11.92. The market will decide.

me too in at 11.90$
I live in Italy and I confirm what David said about Geox...it is very popular here in Italy, the brand is well recognized, a lot of people buy and wear Geox products.

CROX didn't make the island patter I was expecting. But I remain confident that the stock is a bargain at current levels and will keep holding.

(not much time for deeper updates today)

I like the strategy on this one,and DIVX too,buy low and sell higher.

Hi David,

in one of your very recent post, you said you still don't know how to find the winning stock.
Me too, of course, I don't know how to find it.

It is indeed interesting notice that:

1) stock price is 99% correlated to the earnings of this stock
2) the fundamentalist approach is the only one that is able, over the long term, to obtain outstanding results: this is not a theor, but it is the approach of the most reputable money manager in the wordl, Buffett comprised.
3) there are industries that in the future will be the leaders, while other will disappear. If you look at the past, you can notice that during 30's there were hundred of automobile producers in USA, now only 3 or 4 have survived.

So, to get to a conclusion: we should look, all together, to stocks that will be the leaders in future industries and, given this, they obviously produce the higher earnings despite the competitors.

Pure theory and utopia?
Probably yes, but it is also a fact that the most important money manager used this approach in investing, and only this.

I remain looking forward to your great picks, David!!

Ciao,

Tera

       

AP
Crocs wins copyright lawsuit, gets $56M in damages
Tuesday May 13, 8:28 am ET 
Crocs subsidiary wins coypright lawsuit against Chinese shoe companies


NIWOT, Colo. (AP) -- Shoe company Crocs Inc. said Tuesday a subsidiary won a federal copyright and trademark infringement cast against a number of Chinese shoe companies.
Jibbitz LLC won the verdict against Jinjiang Huakai Shoes and Garments Co. Ltd., Jinjiang Jiaxing Shoes and Garments Co. Ltd. and Yuanhui Chen.

The company said the U.S. District Court in Nevada granted an injunction barring sales of infringing products by the defendants and awarded damages of $56 million in addition to attorney fees and other costs.

Crocs said the court also found that Jibbitz owns all rights, title and interest in its shoe charm designs.

Jibbitz filed the suit on Feb. 22.

Update:

I'm just updating the trading plan and introducing a stop level.

Trading Plan:
HOLD CROX with a stop @ $10.50