"We see Crocs as a lifestyle brand with global appeal that appears both proven and sustainable," he wrote in a note to investors. The stock put in a 52-week low price of $12 on Nov. 15, but on Tuesday it leaped to $13.49 on heavier than normal volume.
CROX trades at 8.65 times forward earnings, has very little debt, has over $315 million in total cash (as of Sept. 30) and a price-to-earnings to growth (PEG) ratio of only 0.90. All these factors indicate a stock that is undervalued, so no wonder the upside response was so positive.
Below is what I'll call "the chart of the day." It shows the one-year price movement of CROX versus its retained earnings. By that measure this company may just end up on some big predators' takeover wish list.