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
- Russia Escalates Syria Proxy War: Threatens Full Naval Blockade Of Syria | ZeroHedge
- Egypt’s Gas Find Sets Mediterranean Geopolitics on Fire | Financial Sense
- Tanker Rates Soar As China Hoards Saudi's "Cheap" Oil Amid Biggest Price Cut Since 2012 | ZeroHedge
- DuPont Stock Soars After CEO Quits And Company Slashes H2 EPS Guidance By Nearly 50% | ZeroHedge
- The American 'Recovery' In 1 Chart | ZeroHedge
- Credit Markets Suggest Caution | Financial Sense
- Ron Paul: I Wish Nobody Was Bombing Syria | ZeroHedge
The most relevant financial news and articles from the Internets
- Greek government to submit draft 2016 budget to... | Business Insider
- Nigeria Senate names 20 nominees for president's... | Business Insider
- 'Li Na factor' not enough for China | Business Insider
- Study cites cybercrime's rising costs to corporations | Business Insider
- Shero, Hynes era starts with Devils, Lamoriello gone | Business Insider
- Here comes Markit services PMI ... | Business Insider
- Harvick dominates in must-win race to advance in Chase | Business Insider