On the surface, it may appear that Cambridge Investment Research Advisors Inc. has lost faith in Crocs, Inc. However, a deeper analysis shows that their decision to decrease their position by 29.7% during the fourth quarter is not necessarily indicative of a lack of confidence in the casual footwear and accessories company.
Crocs, Inc. has been on an upward trajectory for some time now, with shares opening at $104.32 on Friday and reaching a 1 year high of $151.32 recently. The company operates across several regions including North America, Asia Pacific, Europe, Middle East, Africa, and Latin America (EMEALA), as well as distributing under its HEYDUDE brand.
So why did Cambridge Investment Research Advisors Inc. sell off almost 30% of their holdings in Crocs? It’s worth noting that even after selling 1,886 shares during the quarter, the firm still owned 4,469 shares worth $485,000 according to its most recent SEC filing.
It’s possible that this move was simply part of the company’s standard portfolio balancing practices. After all, investing is about being strategic and making calculated decisions based on current market conditions. As the saying goes, “buy low and sell high.” With Crocs’ share price climbing steadily over the past year with no signs of slowing down anytime soon – now may have been an opportune time for Cambridge Investment Research Advisors Inc. to cash out some of their holdings.
Another possibility is that Cambridge Investment Research Advisors Inc. had other investment opportunities they wanted to pursue or needed to reallocate funds elsewhere in their portfolio. Selling off part of their Crocs holdings provided them with much-needed liquidity to do so.
In any case, it’s important not to jump to conclusions about a company’s financial health based solely on one investor’s decision to decrease its position in a particular stock. Context matters – what were their reasons for selling? What’s the bigger picture when it comes to Crocs’ performance in the market?
At the end of the day, investing is a highly complex field that requires careful analysis and constant recalibration based on current market conditions. While it may be disappointing to see some shareholders sell off their stocks in a company like Crocs, Inc., it doesn’t necessarily spell doom and gloom for the business overall. Rather, it’s possible that Cambridge Investment Research Advisors Inc.’s decision was just one small piece of a much larger puzzle.
Crocs, Inc.: A Rising Star in the Footwear Industry
Crocs, Inc. has been making waves in the footwear industry with its signature clogs and now seemingly unstoppable success. Hedge funds and other institutional investors have taken notice of the company’s potential for growth, as evidenced by recent activity involving several major players like Marshall Wace LLP and Assenagon Asset Management S.A. These hedge funds grew their stakes in Crocs during the last quarter to unprecedented levels by acquiring additional shares worth millions of dollars. Portolan Capital Management LLC and BlackRock Inc. also joined in on the buying frenzy, increasing their positions in the company as well.
Several equities analysts have backed up this optimism by issuing positive reports on the stock and raising price targets for it. B. Riley, Robert W. Baird, and Stifel Nicolaus all increased their ratings on Crocs and raised their price objectives substantially within the past few months. StockNews.com covered Crocs’ development too, issuing a “hold” rating. TheStreet upgraded Crocs’ moderate rating from a “c+” to a solid “b”.
Crocs has certainly outdone itself with its latest quarterly earnings report. With $884 million in sales in Q1 2021 alone, Crocs posted $2.61 earnings per share (EPS) — a whopping 21% above estimates from Wall Street financial analysts who predicted earnings per share (EPS) of just $2.
Accordingly, they’ve seen tremendous growth overall: crocs had revenue growth last year of 21%, resulting in net income growth of 39%. That being said, it’s no surprise that insiders are getting involved with the business themselves- CEO Andrew Rees recently sold over nine thousand shares while purchasing over one hundred ten thousand others; additionally directors both purchased three thousand shares each earlier this year.
Experts predict that these factors put together paint a picture for continued success for Crocs and its investors moving forward — they are projecting approximately $11.53 EPS per share for the current fiscal year. With the market’s growing demand for new styles the company will be launching soon, investors can expect to see even more growth potential in the next few years. The popularity of Crocs clogs shows no sign of slowing down anytime soon.
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