CROX and UA

Conspicuous spending and consumerism are bugs that have bitten China and India. Local brands are doing well and juggernauts like Nike are extending their reach.

As Nike looks out, some clothing companies are doing well in the US. I have been following UA and CROX for some time. Back in December, both were on my final list of companies to buy, but I couldn't pull the trigger because of valuation: I prefer to buy undervalued companies. Also, with CROX, I saw more trend and hype than a long distance runner.

CROX has surged 100% since December and UA has actually sagged a bit.

The key difference is the valuation: CROX now has a 22 P/E while UA is 55. Moreover, CROX is growing earnings 100%+ whereas UA is expected to hit 20% for the year.

My mistake on CROX was to rely too much on my perception that they were more sizzle than steak. That is, I believed that they were going to hit their numbers but I also believed that the trendy shoe would last 1 season. Instead, I was shown that they have more going for them. Nevertheless, I still believe that they don't have longevity. Fashion is fickle.