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HOT TOPIC Time to Short Crox?

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MJ DeMarco

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This story reminds me of Krispy Kreme years ago. I remember getting into a flame war on a stock forum years ago when KKD was in the 40's -- I proclaimed that the stock and the company was a fad, and soon the stock would plummet. The KKD Kool-Aid drinkers were quick to lambash and cast me as a fool -- "Krispy Kreme is an awesome stock" the lemmings touted.

I bought put options on KKD and profited a nice tidy sum in the months that followed. KKD is now a 6 dollar stock that only can reminisce about the glory days.

Now, I see CROX setting up in a similar type position.

Is the fad over and will the stock soon follow?

Time to short and/or buy put options?
 

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Peter2

Fastane Legend. RIP.
Aug 2, 2007
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It's hard to tell. They will launch a line of apparel in October, and that could push the stock much higher if it's a hit. It's a well run company that is doing the right thing with expanding their business.

I haven't looked in to the company very much, and have not listened to any conference calls, so I can't really make any predictions.
 

kidgas

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Jul 25, 2007
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Because I feel it is impossible to determine when a fad will end (ie when a hot stock will turn cold), I would go with the puts. The December 55 puts can be had for about 7 per share. Put on about 25-30% of the total position. Then, give it a week or two. If you are right, add some more or add some 50 puts at a lower cost. If wrong, cut your losses and re-establish at a different price since the stock has moved up.

I like Livermore's technique of legging into a position and adding to it after you have a profit. That is what I have been doing with DRYS in the collar positions and it is working well.
 

piranha526

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Aug 20, 2007
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Kidgas,
I remember KKD because I had calls on the way up and some when it started to slip which I sold for smaller losses on the way down. It was more of a fad than crox.
I (personally) wouldn't look to pick a top but if I did, i would wait until it was below the 50-day moving average (at the least).

I do see one thing on the charts: a gap that hasn't filled from May in the low $30 range. In my 10 years of trading, I know this: most gaps fill and do so within a year.

We'll see.
 

MrDoctor

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Aug 13, 2007
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Hell yes I would short crox. I would do it now, it is near its high. Analyst are expecting their "mammoth" line to be the "must have" items of the holiday season :rofl:. Who would wear this crap?

Overseas sales are stong, but it is not understandable as to why they trade higher than NIKE :rofl:.
 

piranha526

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Aug 20, 2007
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Ironically, I wrote about CROX today:
The stock (CROX) seems to be hitting some resistance near $60 but that is quite normal in this area. Look for a pullback of 10%-20% with support above the 200-d m.a. If is holds the support, develop a strong risk-to-reward trade setup and pounce with a possible $60-$100 run in the future. Do note that the stock has a gap-up from May that has never been filled ($30 lower than highs)! I agree with MrDr - who wears this ugly crap?

As JScott says, share prices means '0' - nothing!
 

kurtyordy

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Aug 28, 2007
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thanks Chris.

I just shorted 100 shares today at $64/share. I just missed the high by $0.95, but only of $0.38 now.
 

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TNT

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Aug 31, 2007
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I think you might do an option on These ugly things. Everyone is saying that the holiday season is not going to do well. I think companies like crok will take a big hit. With the way things are going you just do not know? I like options.
 

randallg99

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Aug 9, 2007
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If you have read their financials, you will see that their margins are probably some of the highest I have ever seen.... these fabricated `shoes` are real genuine money shaking money makers. Do I think the stock is bloated and the forward P/E is high? Yes. But I dont fight the tape.
 

Rawr

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Aug 12, 2007
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Who would wear this crap?

It is vastly popular in my university - the students can not get enough. And when I was overseas last month they seemed to have crox available at a lot of places as well.
 

TNT

New Contributor
Aug 31, 2007
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It is vastly popular in my university - the students can not get enough. And when I was overseas last month they seemed to have crox available at a lot of places as well.

Samething happen with the pet rock...LOL:banana:
 

Rawr

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Aug 12, 2007
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Crox founder is on Big Idea in 3 mins on CNBC

Edit:

After viewing, some notes:

The rubber shoe was just the cash cow, they know it and now they are using it to expand to another shoe type and apparel

Clothing is apparently designed to be "after work" clothes when you get home. And get this - crox shoe material is woven into the fabric.. The stuff looked like swim body suits but you are going to wear them after work at home..hmm
 

imirza

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Jul 29, 2007
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Looks to me like CROX is breaking out. With the market at all time highs , a run to $100 is probably a very safe bet. I would think we get there before January. From a technical perspective there was a bullish MACD crossover last week. The 50 moving average held support. A very safe place to go long.

For all those who think CROX is a fad, look at the people who probably filed BK trying to short HANS. I'm sure there were many who though energy drinks were a fad.

On another note, it does look like CROX biggest shareholder Mazama Capital is lightening up its position. http://www.nasdaq.com/asp/Holdings.asp?symbol=CROX&selected=CROX&page=holdingssummary . When the biggest institutional holders start selling that is the time to be getting out. If Mazama continues selling along with other institutional holders than CROX is likely to fall in price. The big funds are responsible for 99% of stock moves. The little speculators are fairly insignificant in the overall picture.
 

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piranha526

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Aug 20, 2007
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Kidgas,
I (personally) wouldn't look to pick a top but if I did, i would wait until it was below the 50-day moving average (at the least).

Still above the 50-d moving average and has not been a great short. Topping signals once again but above all major trend averages! be careful unitl a real signal is flashing!
 

MJ DeMarco

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Happy Holloween :eusa_clap:.

I'm not short CROX (thanks goodness) and looking at the chart, I wouldn't. Its a nice looking chart and there is no way I'd go against it. I'd have to see some sort of breakdown to make that play.
 

MJ DeMarco

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How about the fact that they're down $18 after-hours?

Does that qualify as a breakdown? :)

You bet! I missed the report ... guess the street didn't like it. I thought Mr. Doctor was being a smart-a$$!
 

piranha526

Contributor
Aug 20, 2007
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New Jersey
Looks like CROX was swallowed:
http://www.chrisperruna.com/2007/09/20/will-crox-get-eaten/

It's all in the institutional numbers (printed these in September) - somebody knew early!

Listen to what the Institutional Buyers are Saying (with their actions):
Held by Institutions: 557
Money Market: 241
Mutual Fund: 304
Other: 12

New Positions: 172
Positions Sold: 75

Shares Held: 104.9 mil
Shares Held Previous Period: 118.1 mil

Shares Bought: 28.5 mil
Shares Sold: 41.7 mil

Value of Shares Bought: $1.68 bil
Value of Shares Sold: $2.46 bil
 

MJ DeMarco

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So who wants to run the numbers on, say, 10 put contracts bought last week -- what would they be worth now? ROI?
 

piranha526

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Aug 20, 2007
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So who wants to run the numbers on, say, 10 put contracts bought last week -- what would they be worth now? ROI?

Well, 10 Nov 70 puts bought yesterday would run you an open of $3.91 to a close of $3.57. They went for $6.97 a week ago at the close. Went for approx. $7.00 a month ago.

Currently trading near $21.00 per contract (near the day's high).
Up 500% today! Fast lane if anyone had the guts to pull the trigger prior to the earnings release.

So, let's say someone did buy 10 at $3.80 for a basic cost of $3,800
They could sell right now: 10 at $21.00 for $21,000
or a profit of $17,200 (minus all fees, taxes and bid/ask spread).

Even a buy last week near $7.00 for $7,000 would run you a profit of 200% or $14,000

Not Bad!
 

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