Crocs, Inc. (CROX)

dinasourneil (99.96) Submitted: 3/17/07 2:12 PM : Start Price: $23.25 CROX Score: 75.25

Though I have made a little bit of money in my own account on a put for these guys, after the recent decline this probably isn't the best spot to pick for an under perform call. However, long term I don't think this stock is going anywhere but down long-term for the following reasons.

1. So many cheap knock-offs, almost indistinguishable from the originals with substantially lower price points at the major retailers will limit growth inroads stateside.

2. Insiders have cashed out big time and continue to do so.

3. So-called proprietary croslite is not protected by patents.

4. Even though they are attempting to diversify their product offerings, they are still within the same basic concept, plastic shoes.

5. Comps valuations to similar companies not riding high on fads make CROX seem very very richly valued as is. I honestly can't imagine these things still being as popular as they are now in 5 years. I can imagine Mo Rocca making fun of them on a VH1 Remember the 00s special though.

5. Though sales growth is impressive and the income statement appears healthy, looking at the most recent 10Q cashflow statement shows most net income growth swallowed up by concurrent rises in accounts receivable, and a decrease YOY in operational cash-flows.

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