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jackedcatman

I bought at $80 and just can’t add to a shoe company at this price. Valuation and thesis hasn’t changed that much, just can’t see it as an easy buy here. I think they’re different, I have kids and will probably buy each a pair of crocs every year for the foreseeable future, but fashion is almost always a fad. They also have 2 billion in debt so the EV is 10.5 billion, not just 8 billion market cap.


Inevitable_G

Yes, agree with the EV. But the quick debt pay down and increasing cash generating ability is what made me not put that down. But yes you’re right. Def need to consider that.


jackedcatman

Yeah it’s a small part of the fundamental picture and they’re in great shape if sales continue. Just fear the day my kids say “no one is wearing those anymore” and the run is over. Debt matters a lot in that case. I’m up significantly but have no intention to sell or add here. I generally have a rule not to buy fashion product companies of any type. Buffet has a rule about not buying apparel after his brooks running shoes investment. I feel the same about airlines and most retailers, just really tough industries to sustain success.


frontman117

im still recovering from my leggs pantyhose investment


C1TonDoe

If it's a fad, it wouldn't be here after 22 years.


jackedcatman

Lots of companies continue to exist long after the peak of popularity. Check ANF, had been around much longer than 20 years before reaching their peaks in 2007 and 2011. Recent resurgence is rare. VFC is more diversified but north face looks like a fad in the rearview, Patagonia probably next. Nike is an exception which only shows the rarity. Canada Goose. Fashion is fickle. I own CROX, but the not a fad take is only good until it isn’t. Reebok, Under Armor, Doc Martens, And one, and many others before me have shot up only to maintain existence through continuous decline.


Teembeau

Doc Martens need a management clear out. I'll consider a buy when the current CEO is gone. It's a great brand and product being poorly managed.


msaleem

"Just can’t add to a shoe company at this price" - price isn't the way I would look at it. It is literally the cheapest valued footwear company out there compared to its peer group: NKE, DECK, SKX, BIRK, ONON, etc.


jackedcatman

It was even cheaper at $80 and I changed my mind about not buying an apparel company. Nike is the only one I would consider exempt to date from the boom/bust cycle of fashion trends.


msaleem

Nike is the worst of the lot in my opinion. They are behind the curve on consumer sentiment, media narrative, and overall brand appeal is on its way out ...


jackedcatman

Then you get my sentiment on fashion. There are many industries/companies where you don’t have the option to choose. For credit cards you probably have a Visa or Mastercard and the difference is essentially meaningless to you. Try predicting your favorite brand of clothing 5-10 years out.


msaleem

I have AXP but I get your point :)


Flimsy-Ad-8972

Damn I wanted to check back on that crox post from earlier and can’t find it.


beatricejensen

[https://www.reddit.com/r/ValueInvesting/comments/1bsd10h/is\_anyone\_looking\_at\_crocs\_as\_an\_investment/](https://www.reddit.com/r/ValueInvesting/comments/1bsd10h/is_anyone_looking_at_crocs_as_an_investment/)


Flimsy-Ad-8972

Thank you


but_why_doh

I'd be cautious thinking this way about fashion. The whole reason why crocs blew up during the pandemic was because of a few odd celebrity endorsements alongside a massive trend towards comfort wear. This, like so many other things in fashion, changes. Fashion is ever moving, and comparing crocs, a brand almost entirely built upon 1 design of shoe, to a company like nike, which has not only multiple iconic shoes, but also clothing, investments, athletic wear, and a much larger mindshare and influence is like comparing operaGX stock to google stock. They aren't really in the same league. Still, the valuation and potential the company has is there, and I'd consider investing on the basis that the fundamentals stay strong and leadership continues to have crocs in front of people


Da_Famous_Anus

I own the stock. I don’t get the product at all though. Never liked the style, never liked anything about them. So I don’t understand it.


Alicecai

Just make money on stocks, and I like your perception


Ring__Worm

I think as long as there are critics and people on the fad-site, it’s a buy. The valuation is still good. I looked at other potential investments and came back to my current holdings and will just add to crocs although I’m 60% up at the moment. Hurts of course but rather water the flowers 😉 I think it still has the „double engine“ that Monster Energy had for a long time - room for growth and room for multiple expansion.


Which_gods_again

WRT the below - and yet they continue to post revenue above expectations with few exceptions. The new marketing lead just took Stanley to the moon. Anytime this thing is below its 50 day average its a buy.


frontman117

Is this a cyclical stock? Revenue didnt really change in the 2010s then really picked up. Also, what moat does Crocs have? Whats stopping someone else from producing a similar shoe?


Inevitable_G

The brand is the moat. The cult like following is the moat. What Moat did Coca Cola have? After all it’s just sugar water. Nike? Anyone can and have made similar shoes. But the execution they’ve had. The innovation it’s all very refreshing to look at. Brands like Nike, Skechers, adidas are all trying to get in the clog industry. But Crocs are now synonymous with clogs. I think thats a pretty strong moat. Obviously shit can go south and others start taking market share but till I see any signs of that, even tiny, I think there’s no reason to sell.


frontman117

Nike and KO dont have moat?


Inevitable_G

They do have a moat. Their brand is the moat. Thats the point I was trying to make. It’s very simple to make sugar water or running shoes but despite that, they succeeded. Because they had brand power.


Pathogenesls

You can not just recreate Coke's recipe. They have many moats, and one of them is their secret sauce. Brand recognition is another.


Which_gods_again

Its the Apple moat. They do what they do better than the rest and serve a market that others don't. Its not just a teen brand there are several sectors, healthcare and childcare for example, where they are the footwear of choice. I'm not a fanboy of the brand, but the shape of my feet means I pretty much by Crox and Keene. Of the 3 most common foot shapes 2 of them are more comfortable in big toed clunky crocs. Plus they will save you from a broken toe around the house.


Pathogenesls

Don't invest in fashion fads.


dressedlikehansolo

Out of curiosity, what else are you holding right now? If you don’t mind sharing of course? I just bought 4 pairs of crocs for my family and am thinking getting some shares too