SubscribeTDI Episode 68: Crocs Makes a Great Toilet Seat
August 3, 2008
Guest: Michael Santoli, Barron’s Editor brings some important issues to the front regarding how the media deals with information. Andrew asks about the slant of “big media” toward the bullish argument (or at least they appear to frown on the short and negative ideas). We also discuss the summer market doldrums and ideas to fix for the Auto Industry.
Andrew suggests that there is going to be a HUGE fallout and uprising against mainstream media, and…
- General Motors (GM) takes a whopper of a loss, can we fix it?
- Merrill Lynch (MER) is manipulatiing the news/media.
- Crocs (CROX) makes a great toilet seat.
- Audible.com free audiobook offer.
- The Money Show
- MSN Strategy Lab
- TDI Managed Growth Strategy Virtual Tour
Michael Santoli is an Associate Editor for Barron’s, The Dow Jones Business and Financial Weekly. He writes the “Streetwise” column, offering a forward-looking take on the financial markets, illuminating market trends and identifying investment opportunities. Mr. Santoli is a regular on-air contributor to several cable and broadcast networks.
LISTEN TO PODCAST | LISTEN @ ZUNE – @ iTUNES
Prior to assuming his current position in November 2006, Mr. Santoli had been a senior editor for Barron’s since May 2002, writing “The Trader” column, which covered the stock market and investment trends. Previously he had been mutual funds editor for the magazine since March 2000, when he wrote the “Fund of Information” column, edited the quarterly mutual-fund pullout sections and wrote cover stories for the magazine.
In August 1993, Mr. Santoli joined Dow Jones & Company as a reporter for the Dow Jones News Service and covered the securities industry. He moved to Barron’s in February 1997 as a staff writer and wrote the “Commodities Corner.” In 1998, he began writing the “Striking Price” column, covering the options markets.
Before joining Dow Jones, he worked in New York as a reporter/editor for Investment Dealers’ Digest from June 1992 through early August 1993.
Mr. Santoli has received two Dow Jones Newswires Awards for distinguished real-time journalism. In 1995, he was a member of a team honored for a series of stories on the demise of D. Blech & Co., and in 1996, he and a colleague received an award for their coverage of the securities industry.
Born in Manhasset, N.Y., Mr. Santoli received a bachelor’s degree in history from Wesleyan University in Middletown, Conn.
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Stocks discussed: Crocs (Crox), General Motors, (GM), Merrill Lynch (MER), Ford (F), Apple (AAPL)
ZachZone Stocks: China Distance Education Holdings Ltd. (DL), Incyte Corporation (INCY), China Mass Media Intl Adv Corp. (ADR) (CMM), Rhino Resource Partners, L.P. (RNO), Rackspace, Inc. (RAX)
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The Week Ahead – Crocs, Banks and Beer
August 1, 2008
Here is a peek at my article for MSN Money for this week.
There is plenty of fun in store for this week. The markets have not been taking kindly to missed earnings these days, so why not get right down to some of the ideas you should be looking at as potential opportunities to make a few bucks.
Monday, August 4
If you are looking at a complete disaster, consider the fundamental and technical’s for Nam Tai Electronics. Earnings have been slowing considerably over the last several quarters and sporting a P/E ratio of 12 against an annual growth rate of -3% doesn’t provide much incentive to purchase shares. Add to that the fact that volume has been spiking on share declines and it is no wonder that the trend has been negative. Even though the technology sector has been somewhat stable throughout this recent market fiasco, there’s always an exception. Analysts are looking for $.17 per share of profit on $140 million of revenue.
The travel industry has been under intense pressure as the continuation of the negative sentiment by consumers is causing many people to buckle down and think twice about spending money. But what’s even more concerning is the fact that this is the second time around for Orbitz Worldwide. If you don’t remember the story, this company first came public in 2003 and had a very difficult time earning money. It was eventually taken private after they incurred regular and significant losses essentially obliterated shareholder value. Then, one day in 2007 they reappeared again as an IPO presumably hoping to confound and confuse us into believing that this time something would be different. Now, over a year has gone by and shares have lost almost 60% of their value since they began trading again. Even though there has been a showing of insider buying on this position, the notion that they pulled the same stunt twice, to the severe financial detriment of shareholders makes me, well, angry. As you can imagine, analysts are expecting a loss of $.03 per share for the period on $233 million in revenue. Who knows maybe the third time will be a charm!
Some of the Stocks Mentioned: Crocs (CROX), Nam Tai (NTE), Orbitz (OWW), Archer Daniels (ADM), Leap Wireless (LEAP)
One Week Job – Day 3 Update
November 8, 2007
8:00am on Day 3 and Sean was energetic and ready for the what the day would bring. We went to the office with a full schedule ahead of us and planned out the details, looked at the pre-market news and set out to fund a few opportunities. This day we had the added challenge of fitting in an NPR reporter who was coming to interview both of us and to find out more about Sean’s projects well as a podcast interview with Jim Jubak of Microsoft’s MoneyCenteral.
As the NPR interview was closing and we were wrapping up, Sean came across the opportunity of what looked like a potentially profitable trade into Crocs (CROX). Looking at all of the data, he felt that the stock was poised for a bounce, even thought the overall market had been weak that day. The stock was then sitting at $41 and had shown a good deal of support at that price.
As we were still working on a few other items on the daily to-do list, we initially passed it up even though Sean was getting a bit anxious watching the price action. It wasn’t until it moved up towards $41.30 that a confirmations signal was clearly reached. We bought a small position to see how it would play-out.
It turned out to be a short-hold as the market was becoming more volatile throughout the day and the position was not moving at all from its support level. We made the decision to abandon the position for no-loss and no-gain. (FYI: Sean was right in his assessment of the position and if we had held it, we would have ended the day with a $1 per share profit on that trade)
Other than that, we had 5 successful trades for a nice profit and decided that the markets would have to wait as we had two important meetings that required some preparation. Over all, the day was productive and Sean put to work many of the important lessons learned about trading stocks. Tomorrow will be his final day as he is headed north in search of the perfect baked cake.
(Note: All trading and stock transaction were done under the direct supervision of Andrew Horowitz and no client money was used in any of these trading lessons/simulations)
The Sharks are feeding on Crocs
November 6, 2007
What am I missing? Wasn’t it was only a few months ago that Crocs was the golden child and was going to be the next Shoe-Google. Back then, I was the “stupid one” who had no idea what he was talking about, as once again I was told over and over that this time was different. It was only a few months ago that I warned about the over-valuation of the stock and that $40 was going to be a price to watch for if the stock did not meet investor’s expectations. Today, I write this trying to find answers, not rubbing salt in an open wound.
For the past 2 years or so, the Crocs bandwagon had many well-heeled fanatics buying shares as they were hopeful of a retirement based on the a fanciful valuation of their rubber-shoe empire. Along with that, it seems that the anti-bacterial component along with slipper-like comfort, had most looking the other way from the horrific fashion statement which the bold colors represented from the over-sized hole-ridden footwear. Add that most analysts had Crox at a BUY (or better) and several well known writers/bloggers were continually defending the company at all times. It is no wonder that most investors were in continual BUY mode.
The problem is this: If only a month ago many investors owned shares with the belief that there will be a steady growth of earnings moving forward; why did the stock take such a tremendous hit after posting, albeit disappointing, yet somewhat reasonable solid results? It seems that once again, emotions are the crux of the Crox.
Look at the fundamentals and it is exceedingly hard to comprehend how the stock is trading below the level it was when the essentially all of the information is similar to what was published in May 2007. Fundamentally, not much has changed except for the fact that growth is not expanding at the rate it had been for the past several quarters. Now, unless there is more that meets the eye with the latest announcement of earnings and projections, there is much more panic than logic involved in this sell-off – But you already know that. It is a well known fact that EPS growth slows once a company moves towards maturity. Look at Dell, Microsoft or even Merck. It is not simply the EPS growth percentage, it is also the ratios that are of importance here.
The truth is that Crocs has been the favorite of the “emotional trader”, those that are playing the home-game. The reason for the past run up being so strong was based on strong emotional ties to a stock because of love of past growth. These are the same investors who are now running for the hills – simply selling at any price because they are apparently holding low-cost-basis positions that they do not want to lose on. There is no logical reason for this massive sell-off. Really…
But what does logic have to do with this stock anyway? One more question: Where are all of the die-hard writers now? You know, the ones that were screaming to buy-buy-buy! Why are they not here now, helping you with the situation when the decisions are much tougher. Frankly, running away and pretending the stock did not get cut in half will not provide comfort or direction. So, here is a life-ring: Hold on for the bounce. It is coming and will be strong.
Just to be clear: We sold/shorted at the peaks, now we are buyers in the valleys. Use logic here and profit should follow.
Horowitz & Company clients may hold LONG and/or SHORT positions in CROX.
Crocs – Riding the Rollercoaster
August 6, 2007
I am starting to think I am a Croc’s (CROX) hater or something. Actually, that is not at all true, I am only looking to assess the landscape to see if there is an opportunity to profit on the move of a stock. These days this is the one that has caught my eye with great interest. Many are not happy with me. That is okay. In fact, the more comments and replies that are linked to my rants, analysis and posts, the more I think that there are many shareholders whose engines are revving to high about this.
And for Pete’s sake, it is a stock, not a child or spouse or a parent. DO NOT FALL IN LOVE. That is one of the most important rules out there. Sure, I have been stubborn and negative on this through a nice rally. During that time, shorting into the peaks (as opposed to buying on the dips). The eventual covering has turned out to be generally profitable. Would a buy and hold have been MORE profitable?… YES YES YES.
But, I am still inclined to believe that this stock is running on fumes even with the tremendous quarter they just had. There is a great deal of “love and lust” that had been moving this stock recently. Just look at the real action of the shares after the earnings announcement.
As many predicted, the shares shot up after the earnings came out. If you look closely, the stock initially traded towards $62 that night. That was for a brief moment though. From there, Read more
