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Bear of the Day: Crocs (CROX)

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There are some trends which emerge in the fashion world and stick around forever. But then there are others which are merely fads, likely to fade over time. Fortunes can be made for those smart enough to invest in the early stages of a fad, but one could just as easily lose a fortune betting an old fad will return. One fad with a loyal following but a terrifying stock right now is our Bear of the Day, Crocs (CROX - Free Report) .

Crocs, Inc., together with its subsidiaries, designs, develops, manufactures, markets, and distributes casual lifestyle footwear and accessories for men, women, and children worldwide. It offers various footwear products, including clogs, sandals, flips and slides, shoes, and boots. The company’s primary trademarks include the Crocs logo and the Crocs word mark. It sells its products in approximately 90 countries through domestic and international retailers and distributors, as well as directly to end-user consumers through company-operated retail stores, outlets, e-commerce store sites, and kiosks. As of December 31, 2016, Crocs, Inc. operated 228 retail stores; 98 kiosks and store-in-stores; 232 outlet stores; and 12 company-operated e-commerce sites. 

Crocs shares were a Zacks Rank #5 (Strong Sell) heading into earnings because analysts had gone out and recently dropped their earnings estimates for the current quarter, next quarter, current year and next year. Just a week before earnings, the drop in estimates took our Zacks Consensus Estimate for the current quarter from 10 cents to 3 cents.

The good news for Crocs is next quarter looks much more promising, with our Zacks Consensus Estimate rising from 18 cents to 22 cents. There is also some optimism for next year where the number has gone from 24 cents to 33 cents.

There really hasn’t been any optimism in the stock price though. Shares haven’t been north of $9 since August 2016. The stock has consistently come under pressure over the last year as most rallies were wiped out just days after they occurred. Now the stock is looking to carve out a bottom at $6. The Commodity Channel Index remains heavily oversold down at -156 and the 50-day moving average has a negative slop and is 33 cents above the current price.

Crocs is in an industry that ranks in the Bottom 7% of our Zacks Industry Rank. Right now there isn’t a single stock in this industry ranked above a Zacks Rank #3 (Hold). Those stocks include Coach COH and Columbia Sportswear (COLM - Free Report) .

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