CROCS Inc. (CROX)
When a fad fades watch out below! Crocs has had an amazing
crash from its high in November of last year to a new 52 week low today of
$8.12 a share.
Not Bad on Valuation
current price/earnings ratio of 5.13 and still expected to grow sales by 10% a
month over the next two months, it seems to be inexpensive. The only issue
comes with its expected earnings over that same time period where the company
looks to drop 27.6% in profit from last year’s same quarter. If the company was
able to profit at its current sales level, it might be worth owning.
Shorts Rule the Day
At its height Crocs was a fast
growing stock but when the high growth turns into slow growth and the price
reflected the higher growth rate, the shorts take over a stock’s price action.
Current levels of short interest in the float of the company stock are at an
incredible 39.3%. With that amount of short interest, a squeeze higher should
be possible, but that has not been the case as the stock consistently has
fallen since late February of this year until today.
not a trade here but a lesson in getting out of a fad when the revenue slows
and the company begins to miss quarters.