Groundhog Day for Crocs
Crocs Inc (CROX) got kicked in the groundhog today, falling 10% and ending at $14.19 a share. That's just 15% away from its 12 month low. However this soccer mom shoe play did the same thing last year as Jim Duffy of Stifel Nicolaus noted. If correct history could repeat itself on the stock and take it right back to $20 (a 40% ROI) before the year is over.
Today the market sold Crocs like a bad plastic shoe that can rip off your foot if caught in an escalator. Crocs Inc. said the holiday season was "difficult" and their backlog growth for the first half of 2013 will be at the lower end of its previous guidance. The selloff has priced Crocs with a a P/E Ratio of 10.2 and EPS of 1.54.
Jim Duffy of Stifel Nicolaus said Crocs didn't provide an update to its fourth-quarter earnings outlook, which calls for breakeven results. The analyst said in a client note that is similar to what the company did last year before the ICR Exchange conference, and it was viewed as a mixed signal. But Duffy said when Crocs did report quarterly earnings for the prior-year period, they were above previous guidance.
The analyst views the stock as undervalued and kept a "Buy" rating and $20 price target on it.
Duffy could be onto something here, last time this happened Crocs went on a 25% run. For once an analyst that is positive on a stock might be right. The market is happy to punish Crocs on any bad news, it's par for the course on this stock. Much to our amazement Crocs Inc. only has a short float of 4.5%. Could this mean traders don't expect this stock to tank in 2013?
Bottom line: Crocs could easily keep falling, but this might be a overreaction by traders holding shares. Q4 earnings aren't due until next month so trade at your own risk. Until that time CROX might be worth going long with a small position.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- The False Promises Of 2% Inflation | ZeroHedge
- Russia’s Crisis Is Europe’s Crisis | Financial Sense
- Conference Board Leading Economic Index Increased Again in November | Financial Sense
- My Reading of the FT on China’s “Turning Away From the Dollar” | Financial Sense
- Credit & Volatlity Are Flashing Red, "But We Aren't In A Crisis, Are We?" | ZeroHedge
- There Is Hope In Understanding That A Great Economic Collapse Is Coming | ZeroHedge
- S&P 500 Melts Up Over 100 Points In 3 Days, Nears All-Time High | ZeroHedge
The most relevant financial news and articles from the Internets
- 18 Bookstores Every Book Lover Must Visit At Least Once | Business Insider
- Young People Are Risky Investors — And It Isn't Paying Off | Business Insider
- Here's The Full FBI Statement Calling Out... | Business Insider
- 2012 Honda CR-V | BusinessWeek
- 5 Awesome Google Features You Didn't Know About | Business Insider
- HP Stream 13 Notebook Review: A Super-Affordable Windows Laptop | TheStreet.com
- See How Many Of 2014's Biggest Events You Can Spot In This... | Business Insider