The only thing wrong with Crocs is that their stock price was $70 a few years ago. Their balance sheet is fortress like, they have an expanding product line and they are a takeover candidate. When you compare their financials to a company like Netflix, you have to question why analysts will gush over Netflix but criticize a $13 dollar stock with $3 a share in cash and no debt.
I think it is largely about momentum and the fact that they have ticked off analysts the last couple of quarters by not meeting guidance. The guidance is tough, many companies in their position sandbag and make no mistake it is difficult to project when you have international, retail and wholesale. I don't really care about missing the guidance too much. The momentum crowd, as much as I hate to say it, is important. A company that manages the news cycles and provides nothing but good news gets treated well by the momentum investors and the truth is that they really do drive a good chunk of the market. Here, it is really hard to place a positive spin on what is happening in Japan. That is structural and one cannot do a thing about it except wait for time so at least they can start reporting positive comps once again. Perhaps they should have spent more money on expansion in 2012 so they could have kept earnings down because right now they are showing significant deceleration in profits and their ROE is now merely o.k. rather than exceptional as it has been in the past.
Perhaps it is best to sell and buy back in six months when Japan has washed through. Problem with that approach is that things could turn in a big way elsewhere and you miss it.