Crocs still an Investment?


Once the future of footwear and a high powered growth stock. Today it's what?

The King and Queen of Nurse and Soccer Mom footwear is Crocs Inc (CROX). You see kids wearing them at the pool but is this a company worth investing into at this point?

Ten years ago CROX shares were trading in the $60 range. Fast forward to today's price range of $8 and change represents an 80% decline in market cap. Today CROX shares had a nice bounce of 5% and YTD the stock is up 16%. Is there hope?

What isn't to like is the daily volume of the stock, approx. 800,000 shares trade daily. That's thin and the ability to get in and out of the stock are not lightning quick. The stock has traded very volatile this year despite the 16% increase.

A quick look at the chart shows you what you are getting into - a traders game, not an investment.

CROX Crocs, Inc. daily Stock Chart

Despite the light volume and volatile share price the short float is low at 5.4%. The average target price is $8 for the analysts covering the stock.

So why even write about Crox?, that's why:

  • In early May, Crocs (NASDAQ:CROX) shares rose 23%, to $7.28, thanks to an unexpectedly strong Q1. But enthusiasm waned, and shares have dropped back to $6.45 as of Friday.
  • Barron's says investors should renew their faith: "The stock, which has lost 90% of its value since mid-2007, now costs about 20% of what you'd pay online for a pair of its "classic" clogs for kids. That's an excellent deal, as the Colorado-based company climbs back to profitability and finds a better fit in an increasingly competitive marketplace."
  • Robert Medway, co-founder of Royal Capital Management, which owns the stock, believes shares are worth at least $11. "This is a beat and raise if I've ever seen one," he says.