Wedbush analysts assumed coverage on eighteen footwear and apparel stocks on Tuesday, with giants like Nike and Under Armour securing an “outperform” rating. Inside Edge Capital Management’s Todd Gordon, however, finds rival Crocs Inc (NASDAQ: CROX) the most interesting in this niche.
Gordon’s remarks on CNBC’s “Trading Nation”
Crocs is up more than 100% on a year-to-date basis despite the recent sell-off due to the supply chain constraints, but Gordon says it is “well-valued” at 20 times forward earnings and a price to earnings ratio of 14. On CNBC’s “Trading Nation”, he said:
I like Crocs. This company has kind of reinvented itself. They’ve come back incredibly with the teen market and has seen massive growth in recent years. We hold this high-flying name in our growth portfolio.
Earlier this year in July, Chantico Global’s Gina Sanchez also reiterated not to underestimate the stock. Shares of the $8.54 billion company are up nearly 3.0% today.
Other reasons why Gordon likes Crocs Inc
According to Gordon, Crocs is still holding a crucial trend line support at around $140 a share. Other reasons he likes the Colorado-based company include its superior profit margin compared to its rivals as it is “tapping this digital leverage”. He added:
It’s a direct-to-consumer operator. Half of its revenue comes from there while many of its competitors source their revenue from wholesale.
Much like its peers, Crocs also sources from COVID-crushed Vietnam. Gordon, therefore, recommends investors look for insights related to the supply chain challenges in the company’s earnings report scheduled for October 27th.
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