CROX getting Swallowed
I wrote a post titled Will CROX get Eaten? on September 20, 2007 and strongly noted the declining institutional support (see numbers below). Someone was jumping out of the stock and we now know why!
Stocks only churn when buyers and sellers are struggling to take control. More often than not, stocks churn because BIG institutions are selling shares to the small retail buyer (the sucker). Institutional numbers and charts that back them up don’t lie! The big boys can’t hide if you know how to read them.
Crocs Inc. (CROX) is down about 25% in pre-market trading after it released disappointing revenue and a poor outlook going forward.
FAD!
See my analysis from September; the foreshadowing of today’s opening:
Recent churning action below $60 per share shows that buyers are no longer in control of the stock. However, sellers haven’t completely gained control either. It is a tug-of-war between supply and demand as we await the ultimate direction of the next trend for the heavily covered Crocs Inc. (CROX).
Study these institutional numbers - it was clear in September!
Listen to what the Institutional Buyers are Saying (with their actions):
Held by Institutions: 557
Money Market: 241
Mutual Fund: 304
Other: 12New Positions: 172
Positions Sold: 75
Shares Held: 104.9 mil
Shares Held Previous Period: 118.1 milShares Bought: 28.5 mil
Shares Sold: 41.7 milValue of Shares Bought: $1.68 bil
Value of Shares Sold: $2.46 bil
- The number of shares held has decreased by 12%
- The number of shares sold exceeded the number of shares bought by 46%
- The value of shares sold was $776 million more than bought
We knew someone was dumping shares in September and trying to do it quietly but they weren’t quiet enough. Yes the stock went on to breakout from the churn area but it continued to make new highs on lower volume - a red flag!
Someone is getting off this rising star! Now, the question remains: Will this former rising star turn into a “thing of the past” falling star? CROX looks like a fad to me because the shoes are hideous but they make a TON OF MONEY! I am no longer confident about a long position but I CAN’T take a short point of view either. Not until the signal bell rings! If it confirms, JUMP ON IT – IN EITHER DIRECTION!
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Awwh…the kids like ‘em. I’ll be buying them another pair next summer.
I agree though…the shoes are butt ugly.
Newer models are “not” ugly and I used to be skeptical about them…they really are THE most comfortable shoes I have ever worn…
The kids love ‘em. Will Wall Street continue to love them? If thye make money, they will. If they fade, they won’t - see KKD (Krispy Kreme).
Yea, i’ve never understood CROX (I don’t like the look of them) which is why i’ve never bought into the stock.
Hey Chris, I was wonder where do you get your research from such as “Shares Held Previous Period: 118.1 mil” and “Value of Shares Sold: $2.46 bil” for this particular month. Thanks!
Lol @ “FAD!”
You may be right though. This one may never bounce back.
Jack,
I use Vickers Research
I’ll bet you got a ton of hate mail when you first wrote about CROX. That name has had one of the most emotional investor bases that I have seen in some time. While the company is amazing and the shoes are comfortable (yeah I have some), the stock has been an accident waiting to happen. Tough to play these names with appropriate risk control
Zach,
I had a few people tell me I was crazy in September and then again in October as it made new highs.
Bottom line: We can never ignore institutional selling.
To all,
I get my institutional numbers from Vickers Reseach.
this is the first stock I ever owned,and so far the only. No clue what I’m doing, not too much anyway, but I think I’m in it for the long haul.I thought I really picked a good one, up,up,up!wow I was getting excited.Now this big drop.I don’t get it.Guess I’ll wait and see.
Fad or no? In the 60’s everybody had to have cars with humungous chrome bumpers & gigantic fins. Then along came a reverse statement, dressed down inexpensive cars that ran well. Everybody said they would never survive, but it was the industry that changed. Gucci, Prada, $150 sneakers–that’s what doesnt’ make sense. Inexpensive, comfortable shoes that don’t stink of sweat or fall apart when they get wet…who cares what NY fashion snobs think? Plastic shoes are here to stay. Get used to it.
Chris,
I round tripped this stock, had a great gain but gave it all back. Where did you find the information on the # of institutions holding the stock, the buying and selling volume and amount?
Sterling
Sterling,
I gather my institutional data from Vickers Research.