Thursday, September 07, 2006

Calls of Note Part 2

- Piper Jaffray is positive on Crocs (NASDAQ:CROX) saying diversification of the Crocs product portfolio remains central to firm's investment thesis. They believe appeal for the Crocs brand spans multiple demographics, retail channels, and geographies, and a broad offering of specialized products mitigates risk from competition, creates channel differentiation opportunities, and drives sales and pricing leverage. As visibility continues to improve surrounding supply-demand, retail penetration, international expansion, and complementary revenue streams, they think shares are poised to move higher, trading in line with its LT earnings growth rate near 30%.

Crocs has doubled its product offering over the trailing 9 months, now managing a portfolio of 20 styles, many of which are less seasonal in nature. Piper believes fall/winter 2006 marks a pivotal point in the Crocs story as retailers gauge year-round demand for the brand. Should sales prove to outpace plans, as they have to-date, they expect accelerated bookings into late-FY06 and FY07, upward revisions to estimates, and further multiple expansion.

Piper is raising their FY06 & FY07 estimates, reflecting increased confidence in growth initiatives. Tgt goes to $40 from $38.

Notablecalls: The general buyside view has been that CROX will have one more big qtr and after the fall/winter sets in, the results will cool off. Piper's comments may ignate some different sort of thinking. And that may send the shares higher. I'd be looking to buy CROX today. Gonna call this one actionable.

No comments: