This Under-The-Radar Retail Winner Up 260% in 12 Months Could Have More Upside, Trader Says

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One winner in the retail space has quietly been making new highs after rallying more than 260% over the past 12 months.

Crocs, the footwear brand, has roared higher on the back of robust demand. That stock added another 10% on Thursday after reporting quarterly revenue nearly double from a year ago and forecasting another 60% sales growth in its current quarter.

Even after that run, there's still value to be had in the name, according to Gina Sanchez, chief market strategist at Lido Advisors.  

"Who knew they had such an incredible trajectory?" Sanchez told CNBC's "Trading Nation" on Thursday. "And, they are so cheap relative to other retailers, particularly footwear. They're trading at 20 times forward PE, 22 times trailing which is to say that they're expecting great growth, and that growth is not yet priced into the stock."

Crocs earned $2.23 a share in its June-ended quarter, higher than $1.01 a year earlier. It's expected to report $5.80 a share in profit for the full year, 80% higher than last year.  

"The children's market is always interesting because it's sort of a naturally regenerative market when you're constantly buying. The fact is they have expanded their whole retail line across the adult market as well," added Sanchez. "This is interestingly a stock you shouldn't underestimate."

This stock caught Blue Line Capital President Bill Baruch's eye in 2019. He said he regrets not buying it when it succumbed to the coronavirus pandemic sell-off early last year and is now watching for an entry point to jump in.

"The company has done everything right – everything from celebrity sponsors, they've done a great e-commerce pivot during the pandemic and another great earnings report here with accelerating growth," Baruch said during the same segment. "I do think that there is a place to buy here. I'm looking at the technicals."

He said he would be patient in waiting for a pullback. His biggest buy signal would be if the stock fell as low as $92, a scenario he sees as unlikely right here. It would need to fall 30% to reach that level. He sees a more likely move as a pullback below $120, its newest support level formed by the latest breakout.

"If you break below $120 though, we could shop around a bit between $110 and $120," said Baruch.

Crocs closed Thursday at $131.93.


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