Crocs, Inc. (CROX)

recked (84.30) Submitted: 7/30/2008 5:46:34 PM : Start Price: $4.48 CROX Score: +28.01

How low can it go? At $4 and change, it's in M&A territory. Beyond the commonly stated opinion that it is simply a fad, consider that the recognition of the product on sight, and the knock-offs copying the appearance (but unable to copy the actual design, since it cannot copy the resin material used in the product) show that it is, if fact, a recognized brand. Is the proprietary resin *that* special? I don't know, but people who wear the "real thing" swear that there is functional difference in the footbed of the shoe. Is it the kind of innovation like the "waffle" tread design that launched Nike? That remains to be determined.

Totally ignoring the fad, pro or cons of the shoe, with the current stock pricing below book value, the high profile sponsorship of the Pro Beach Volleyball tour (which demonstrates it's appeal to the younger demographics), licensing agreements in place with just about everyone (including Disney, pro sports, college sports and NASCAR), low debt... CROX ought to be an attractive target for Nike or Adidas wanting to expand into a sporty casual shoe line. Buy at the current share price, and figuring buyout at $9-$10, I see a tidy little profit.