Voss Capital, an investment management firm, released its third quarter 2023 investor letter, a copy of which can be downloaded here. In the third quarter of 2023, the Voss Value Fund, LP, and the Voss Value Offshore Fund, Ltd., delivered returns of -8.3% and -8.9%, respectively, to investors, accounting for fees and expenses. This performance was in comparison to the Russell 2000’s -5.1% total return, the Russell 2000 Value’s -3.0% total return, and the S&P 500’s -3.3% total return. As of September 30th, 2023, the Voss Value Master Fund maintained a total gross exposure of 155.6%, with a net long exposure of 82.9%. Take a moment to review the fund’s top 5 holdings to gain insights into their primary investment choices for 2023.
In its Q3 2023 investor letter, Voss Capital mentioned Crocs, Inc. (NASDAQ:CROX) and explained its insights for the company. Crocs, Inc. (NASDAQ:CROX) is a Broomfield, Colorado-based footwear company with a $5.0 billion market capitalization. Crocs, Inc. (NASDAQ:CROX) delivered a -23.47% return since the beginning of the year, while its 12-month returns are down by -10.16%. The stock closed at $82.98 per share on November 8, 2023.
Here is what Voss Capital has to say about Crocs, Inc. (NASDAQ:CROX) in its Q3 2023 investor letter:
“Compare this mega cap multiple expansion for two companies with negative earnings growth to just one small cap example from our portfolio, Crocs, Inc. (NASDAQ:CROX), which we believe is the single cheapest branded apparel/footwear stock in the entire US market despite industry-leading margins and returns on capital. The stock is down -31% since the end of Q2, bringing its P/E multiple down to its ~3rd percentile relative to its entire trading history (only cheaper in the middle of 2009). Concerns persist around the sustainability of core Crocs brand popularity, which we believe are unwarranted, as the brand continues to grow at a double-digit rate with expanding margins. Near term concerns around HeyDude inventory issues are warranted but the company has been taking steps to correct them and any short-term weakness here is more than offset by the surprise strength of the core Crocs brand which accounts for over three-fourths of the company’s revenue and an even higher percentage of the company’s gross profit. With a growing FCF stream at a current 15% yield and a buyback authorization in place for ~20% of the shares outstanding at current market prices, combined with a ~10% short interest, we think CROX’s forward return prospects are still asymmetrically skewed to the upside from the recent market price of $80.”
Rawpixel.com/Shutterstock.com
Our calculations show that Crocs, Inc. (NASDAQ:CROX) does not belong on our list of the 30 Most Popular Stocks Among Hedge Funds. Crocs, Inc. (NASDAQ:CROX) was in 45 hedge fund portfolios at the end of the second quarter of 2023, compared to 31 funds in the previous quarter. Crocs, Inc. (NASDAQ:CROX) delivered a -19.44% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q3 2023 page.
Suggested Articles:
- 10 Countries with Most Nuclear Weapons in the World
- 20 Best Chocolate Brands in the World
- 10 High Risk High Reward Businesses in the US
Disclosure: None. This article is originally published at Insider Monkey.
