CROX

[Ramsburg]

Update:

The chart doesn’t look good, and it didn’t improve yet. CROX technical layout is bearish, it could be initiating an inversion but still a long shot at this time. It needs to keep trading above this $10.70 level, and that’s why I introduced a stop @ $10.50 a few days ago.

But there is some good news: yesterday, analysts at BOE Research Services initiated coverage on CROX with a BUY rating. This research note was out but I didn’t saw it in Yahoo Finance yet:



A brief summary:

We initiate coverage on the shares of Crocs, Inc (CROX) with a BUY rating. Based on our Shareholder Value Analysis, the shares of CROX are trading at a 24% discount to our $14/share intrinsic value estimate. The company’s expected FY08 economic return of 22% is significantly above its 13% cost of capital, indicating the company’s operations are creating shareholder value. Our BUY rating is based on the following factors.
Consistent Improvement in Sales: Over the past 9 quarters, CROX has reported double-digit revenue growth. Also, for its latest reported quarter (Q1 FY08), the company reported revenue growth of 40% y-o-y. We believe such strong revenue increase is commendable given the weak economic outlook in the U.S. Due to its diverse product-mix, the company has been able to offset the losses from one product against profits from other high-margin products. As the company is consistently reporting strong revenue growth, which has positive impact on its earnings outlook, we believe CROX is well positioned to create long-term shareholder value. Also, we believe the company’s strategy of restructuring underperforming stores will improve its profitability over the medium term.
Outlook: CROX expects its FY08 revenue growth of 20% and its EPS to $1.54-$1.64. Strong revenue growth coupled with increase in market share and synergies from international operations should enable the company to meet its expectations. We are bullish on the company’s ability to meet its guidelines. Further, given the initiatives to reduce inventory, decrease in head counts (announced 669 job cuts recently) and decision to close a Canadian operation should further reduce the company’s operating costs and enable the company to meet its guidelines

Hopefully this coverage will bring some attention to CROX Otherwise, our stop level will probably get hit…

Trading Plan:
HOLD CROX with a stop @ $10.50

[soxguy]

10.50 was breached. Sell interday or wait to see if it finishes above 10.50?

[soxguy]

I think the market is answering that question for me.

[Ramsburg]

Hi, soxguy!
3sof is out @ the stop price. Will update on portfolio page later (on my pda right now).

regards,

[berloga]

I like the automatic stop executions better than the "set to close", simply because most of the time I have no chance to check regularly for the price action. I believe in David's approach to buy fundamentally sound stocks and hold on to them; but I also appreciate the effort to analyze the technical picture for the stock and act accordingly to ensure we are not sucked into huge losses not knowing "something".

Your plan to organize the 3 different portfolios sounds interesting. I especially like the tone you set to buying AND selling the stocks using both, the fundamental analysis and the money protection approaches.

GO 3SOF!!