stlplacePeople who bought the Blackstone (BX) at its IPO debut (around 35), will regret “chasing hot stocks” now. I don’t know how the Chinese State Investment Co. (who took 8% stake at around $3 b) felt about this. Oh well, they are in this for long haul.
Crocs stock (CROX) got a hit today. Barrons ran an article on weekend reminding people taking some profit now, I did it on Monday. But I’m still bullish on the company’s business, especially interntional front: hope people don’t just buy knockoffs?
The split day is June 14, Thursday. It has a nice run since last week. I will wait it calm down a bit before adding my postions. Obviously, I missed the buying opportunity about two weeks ago when there were some insiders sellings. It pulled back to 76~78 at that time. Oh well, no rear mirror view for stocks.
A bit reality check, Crocs 2006 Revenue is 354.7 m; 2007 est. Revenue 675 m, a 90% growth, note the company says sustainable growth rate over next few years is 45%. The market cap as of today is 3.64 b (stock closed at $90.97), so the P/S ratio is roughly 5.39. PE (ttm, trailing twelve month, according to Yahoo Finance) is about 44.77, I think it’s fairly valued at this time.
Also as you may know, President Bush was wearing Crocs. You can see a picture of him wearing Crocs (courtesy of CrocFans).
On Dec 15, 2006 I bought 46 shares of CROX at $42.40. I bought and sold (traded) more CROX afterwards, but I kept those 46 shares all the time. This morning it reached as high as $85.10.
I put it in my Yahoo calendar a while ago. But I have not added my positions because it did not fall to the range I wanted to pull my trigger. Although there are heavy insider sellings lately.
“Shareholders of record May 31 will get an additional share for each they hold on June 14”, see this announcement for more details.
I went to West County mall in the weekend, my first trip after coming back. Among all the St. Louis malls, I like West County the best because it has some of my favorite products (or stores): Apple store; Journeys, the shoe store has Crocs and Heelys; Dick’s Sporting Good has Crocs and Under Armour. Here is my impression on them.
I sold all the remaining HLYS shares on Monday May 7 (before the Q1 earning announcement). While I enjoyed my Heelys shoes, the stock (HLYS) did not turn out to be as good as I expected. The main reason is I jumped too early (I bought it in on its IPO debut at 35 and 32). By doing this I have more downside than upside. The stock will under pressure short term because of its so-so guidance and the secondary offering.
Long term, I think Crocs (CROX) will be better investment than Heelys (HLYS). I saw more and more Crocs in Shanghai stores. While the sales in China is not significant at this time, as I said before, Crocs has wider appeal than Heelys and Under Armor (UA). Like Starbucks, eventually China market will grow and have meaningful impact to the company.
The first quarter is behind us. Just like a public company reporting quarterly results and holding conference call, I am going to do a quick review of my little portfolio. This quarter is a quite rollercoaster for me, as it did for many investors. The Jan and Feb started fairly strong and at one time I had more than 10% gain (I used google finance to track my investments). This is until Feb 27. In one day I lost all my 10% gain because of the loss of my Chinese ADRs (HMIN and MR each lost more than 10%).
I mean the stock market. Dow lost more than 400 points. My brokage account lost about 10% of its value today. The biggest decliners are Home Inns (HMIN) and Mindray (MR); but Crocs (CROX) and Heelys (HLYS) are not helping either 🙁
Now the question is: is this a healthy correction? Or the beginning of (dare I say) bear market? I don’t have the answer. Personally I feel the market needs some sort of correction, especially in China, where the reality did not support the hefty stock prices. But do I think US consumers and business suddenly hit the break on everything? Probablly not. Same thing can be said else where.
New Oriental (EDU, based in Beijing): every Chinese student came to US for study knows that, no need to say anymore.
Home Inns (Rujia, HMIN, based in Shanghai): my friend in my hometown told me about this in summer 2004. He is a small business owner and he thinks that Rujia is clean and economical. He would stay there when he visits Shanghai as long as he does not see his foreign clients. I believe business travallers make up more than 50% of Rujia’s business.
Mindray (MR, based in Shenzhen): found out shortly after its IPO. I always liked medical device makers, both from investment and health/science point of view. The barrier of entry is high: unlike English (or IT) training, you put ad on newspaper, hire some English teacher and find students and a classroom, you are good to go. For medical device, you will need R&D talents (hint: graduates from HUST), good sales and customer support, all of which you can not get overnight. The risk: lawsuits, regulatory procedures.
I listened to Crocs earning call this evening. The numbers look good, it beats the Street expecation as I expected. They also raised Q1 2007 and 2007 full year guidance. Some of the interesting developments:
1) Nascar cross licensing (cross sell). Since they started Disney relationship in summer 2006, they expanded to NFL, NCAA football, NHL (looking for Canada market).
2) International: UK did very well, european is the main growth driver now; build up in Brazil now, expect good growth there (products match Brazilian life style well); China and India (may be significant in 2008). Disney relationship expanded from US to many international markets.
3) New shoes and aquisitions. Less dependent on the Beach and Cayman shoes.