With the holiday of Hanukkah upon us, everyone is looking for a gift to get their loved ones. How about about a pair of Crocs (NASDAQ: CROX)? Not only are they comfortable footwear, the stock is trading at a serious discount to boot! -- OK, bad pun.
Today, 's report by Piper Jaffray speaks of this and why investors may be missing the boat on this story. Piper believes Crocks had experienced "accelerated reorders from retailers during this holiday season. Year-to-date through FQ3, Europe sales have eclipsed $135M."
Piper, which already had a Buy rating on CROX, anticipates in-line FQ4 results and strong FY08 growth with international markets outgrowing U.S. sales. Piper also mentioned that "margins in foreign regions remain above company averages." Adding the favorable currency exchange and the "shares are attractively priced for growth, trading at just 15x forward year estimates." Piper's $82 price target is based on 30x FY08E EPS.
How many times have we seen a broker give a price target double from current prices? I think it has hit the nail on the head with this. The international growth potential for Crocs is enormous. With so much new disposable income being generated in emerging markets, as well as Europe, and with these people wanting a taste of American culture, Crocs is the perfect fit for them. In Israel, walk into a store that sells Crocs, and you'll see a long line of customers looking to buy a pair.
Treat yourself to both a pair of Crocs as well as some shares of the company and you will be feeling great from head to toe.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 12/5/07.
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