Tag: CROX

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Stocks

A crazy week and ICR XChange conference

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What a crazy week. The market continued its downward spiral while we hear all kinds of bad news from economy front: from the credit crunch for big guys and little guys; AT&T CEO says some customers can not pay the phone bills; American Express (one of Berkshire’s core holding) had it biggest drop since year 2002…

I also did something crazy (which I regret) this week. My biggest mistake is I sold some MR shares. Yes it did go up after I sold it, just like other stocks did in the past. I will try to buy back some MR shares in the near future because I believe its growth will not affect by the credit problems we are facing now.

Next week, I am eager to wait what the guys at Crocs and Ruth’s Chris Steakhouse have to say at ICR XChange conference. The link of webcast is here.

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Stocks

Quick check on Crocs’ inventory

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More blindman’s check on elephant…

Crocs stock (CROX) had a big drop in last two sessions, amid the loss of patent lawsuit in EU, and some rumors on the business slowdown in general. When Crocs reported its Q3 2007 earning back on Oct 31 2007, it mentioned there is some excessive inventory because of the disruption of a new distribution center in Europe (and to less extent distribtution problem in Japan and China).

Here I am calculating its historic turn over ratio here (source: Crocs Q3 2006 10k, Q3 2007 10k). The ratio is defined as sales divide by inventory. The higher the ratio, the better for the company’s revenue growth.

First 9 months 2005: 75,022/28,494 = 2.63
First 9 months 2006: 241,824/49,128 = 4.92
Full year 2006: 354,728/86,210 = 4.11
First 9 months 2007: 622,554/195,256 = 3.19

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Stocks

Blindman, elephant, shoes and houses

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It has been a while: I realized my understanding of some of the stocks is very much like a blindman perceives an elephant. I mean, I usually get a partial picture of the real thing, sometimes the partial picture is distorted.

blindman elephant pic
(source: throwtheword.com)

For examples, the investing in Crocs (the shoe). It was a good ride until Oct 31, 2007, when the shoes started to fall off. Initially I was thinking I am doing the research by reading the 10Q, 10K, checking out the things in store, doing some calculation using Google spreadsheet (I regret to check it right before Oct 31 earning). But even with that, did I get a full picture of the whole thing? Same thing can be said for checking out the housing markets in Shanghai (trying to determine how Vanke will do in China).

In other words, it could be pure luck (not my research) that helped me to had a good ride. But then the tough time comes, when the luck is gone, you know what happened.

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Stocks

Fourth quarter 2007 update

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The miserable performance of CROX erased much of my 2007 gains. But thanks to the rebound of Mindray (MR), I am still be able to be above water 🙂

Some random thoughts of Q4 and year 2007 stock performance:

1) Crocs (CROX): I agree with my friend StrengthTrader, Crocs is a fashion product. It’s almost unbelievable for Crocs to become popular in much of the world in such a short time. At least it grew much faster than Nike did 20 years ago. But will Crocs be as big as Nike some day? I don’t know. The market thinks it will NOT (traded at PE of about 20, the company projected 35 to 40% revenue growth in 2008).

2) Mindray (MR): benifit from the global spending of healthcare. Although the US market did not turn out to be as successful as we like, other interntional markets especially South America made up the slack.

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Stocks

CROX, retailer report and credit market

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Morgan Stanley Logo

CROX is halved from its pre-earning high of $75.00, and now it sells at around $37.00, about the same price as Mindray (NYSE:MR). I know I am comparing apple to orange.

On the news, sub-prime mess among big banks, $100 a barrel oil and today weak retailer report did not help. But more importantly, it appears to me the short sellers of CROX, are taking this oppertunity to make a killing.

But all these are short term issues. For instance, the sub-prime loan loss for big banks. Morgan Stanley said it’s going to lose $3.7 billion from this. Although the number could be bigger later on, I would think Morgan Stanley would recover from this, and continue doing their IB business? Similar things can be said for Citibank? I’m not saying go buy those financial stocks now, as I am no expert on financials. But I would think the financial institutions, as the foundation of US and global economy, will not all go bankrupt?

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China Stocks

CROX not so fantastic quarter

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Crocs (Nasdaq:CROX) reported a solid quarter yesterday. It also raised its own year 2007 guidance, but the number is not enough to exceed the street’s “sky high” expectation. The stock already got crushed in the after hour and pre-market trading. It’s likely it will suffer for a while. But I think the fundamental of the business is intact. From my observation in China, this thing just got started…let’s see what Olympics can do for this next year.

Another interesting story about Crocs. When I told my wife that I will have big “paper loss” on CROX stock today, she said why didn’t I sell it yesterday. Yeah, I agree I was a bit too optimistic about the stock. She also said the Crocs should sell few shoes as the weather becomes colder. Very much true. I think that’s one reason the company guided conservatively for the Q4 (and 2007 full year) results.

Seasonality is more an issue for international growth because Europe and Japan, the main growth area currently, is usually colder than US in winter. Unfortunately Australia and Brazil can not make up that…

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Stocks

Baby thrown out of bath tub

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These days it’s not easy for investors who hold US stocks, because the market has been in declining mode after the sub-prime woes. Do you still remember the DOW 14,000? That was July 19, as I wrote a post “IS Dow 14000 relevant“. Well, relevant or not, the Dow has retreated and it’s now under 13,000.

As individual investors we can not precict the market, nor should we fight against the market. But as general market declines, usually there are some good stocks go on sale. For examples, the Crocs (CROX) and Mindray (MR). Both companies reported good earnings, got a pop, and now went back to the pre-earning price. Some possible explanations: CROX got dragged down by the weak US consumer sentiment, Heelys HLYS’ crash; for Mindray, I really could not find a good reason other than short term investors move money to WuXi Pharma Tech (WX). Both companies (CROX and MR) had some insider sell activities too.

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Stocks

A good quarter from CROX

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Here is the results (details from business wire). I will add more after listening to its conference call.

— Second Quarter Revenues Increased 162% to $224.3 Million vs. $85.6 Million Last Year (analyst expected 188.49 to 204.20)

– Company Reports 2Q07 Diluted EPS of $0.58 vs. $0.19 Last Year- (analyst est. 0.40 to 0.48)

— Company Issues 3Q07 Guidance of Revenues between $240 and $250 Million and Diluted EPS of $0.58 to $0.62 –

— Company Raises FY07 Guidance to Revenues of $810 to $820 Million and Diluted EPS of $1.89 to $1.93 –

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Stocks

Lots of conference call

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I need to listen to the following calls because I hold those stocks.

Today: CROX, I don’t want to speculate on this one…too much buzz lately.

Next week
07/31: SNIC, have no idea.

08/01: SBUX, the expecation is more reasonable this time, I don’t expect block buster quarter but I think they should be OK (better than PNRA, maybe?)

08/02: GSIT, they blew up their very first quarter since IPO last time, hope they don’t disappoint this time. Their biggest customer, Cisco, has been strong lately.

The week after:
08/06: MR, I expect solid growth in the US sales; I have no idea about China.

08/07: HLYS, street expectation is low; they blew last CC because of the secondary offering thing. I expect some upside surprise.

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Business Fun

More about Nike NKE

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I wrote about Nike (NKE) a while ago during NBA finals. I joked about Nike is the loser in this NBA finals because their super star James’ team lost. Obviously in the real world Nike is doing very well, especially internationally (Europe and Asia, specificialy China). Here is their quarterly report. This is not surpising consider my mom, who is not into fashions or sports, asked me “buy a pair of Nike shoes” for my 12 years old niece. Note when she talked about the Nike shoes, she was referring to the shoes in sneakers category. Just like when people talked about “google something”, they are referring to “search something on the web”.

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