Choice Equities, a hedge fund manager, released its second quarter investor letter recently. You can view it here. In the second quarter, the fund generated a -17.4% net loss leading to a -34.6% year-to-date performance. Interest rate hikes and market sentiments affected the fund’s performance in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
In the second quarter investor letter, Choice Equities discussed stocks like Crocs, Inc. (NASDAQ:CROX). Headquartered in Broomfield, Colorado, Crocs, Inc. (NASDAQ:CROX) is a footwear company. On August 26, 2022, Crocs, Inc. (NASDAQ:CROX) stock closed at $77.11 per share. One-month return of Crocs, Inc. (NASDAQ:CROX) was 7.64%, and its shares lost 47.22% of their value over the last 52 weeks. Crocs, Inc. (NASDAQ:CROX) has a market capitalization of $4.754 billion.
Here is what Choice Equities specifically said about Crocs, Inc. (NASDAQ:CROX):
“Crocs, Inc. (NASDAQ:CROX) trades at 5x this year’s earnings and 6x EBITDA. Like many of its peers in the consumer space, the valuation implies the market regards the company as a one-time pandemic beneficiary, and business prospects offer little growth beyond this year. While it would be ill-advised to suggest the company did not benefit from the pandemic’s effects on consumer spending on goods, I think this view is incomplete and neglects to incorporate the tremendous success the management team has achieved since they arrived five years ago.
Most recall Croc’s original success as having come from pretty much out of the blue, as the funny-looking but comfortable clogs sent the stock on a meteoric rise shortly after its IPO in 2006. Many also conflate the stock chart with a fad-driven boom and bust cycle, even though a closer look at clog volumes actually shows fairly consistent growth over the last twenty years. Even so, the company was not without its problems, primarily from management missteps as an overburdened cost structure created profit headwinds.
Accordingly, when Andrew Rees became CEO in 2017, he had his work cut out for him. Initially, he focused his efforts on taking costs out and making the operation more efficient. He shrunk the store count by more than a third and began optimizing their go-to market strategy by emphasizing sales through the direct-to-consumer digital channel and through wholesaler channel partners. This enabled the company to devote greater resources to product innovation and marketing, a smart reallocation of corporate resources that offered great payoffs for the branded consumer products company…” (Click here to read the full text)
Crocs, Inc. (NASDAQ:CROX) is not on the list of 30 Most Popular Stocks Among Hedge Funds. Crocs, Inc. (NASDAQ:CROX) was held by 29 hedge fund portfolios at the end of the second quarter compared to 30 in the previous quarter.
We discussed Crocs, Inc. (NASDAQ:CROX) in another article and shared the list undervalued non-tech stocks to invest in. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.
Disclosure: None. This article is originally published at Insider Monkey.
