Crocs (CROX) Returned 248% Gross IRR Over 4 Months - InvestingChannel

Crocs (CROX) Returned 248% Gross IRR Over 4 Months

Silver Beech Capital, a value-oriented investment management firm, released its first quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 8.4% in the first quarter net of fees compared to 10.6% for the S&P 500 and 5.6% for the Russell 2000 index. Since inception, the annual compounded return of the fund is 23.3% equating to 11.3% annualized outperformance over the S&P 500. The firm is focusing on making strong investments in the long term. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Silver Beech Capital featured stocks like Crocs, Inc. (NASDAQ:CROX) in the first quarter 2024 investor letter. Headquartered in Broomfield, Colorado, Crocs, Inc. (NASDAQ:CROX) engages in the footwear and accessories business. On May 17, 2024, Crocs, Inc. (NASDAQ:CROX) stock closed at $140.95 per share. One-month return of Crocs, Inc. (NASDAQ:CROX) was 12.42%, and its shares gained 31.59% of their value over the last 52 weeks. Crocs, Inc. (NASDAQ:CROX) has a market capitalization of $8.556 billion.

Silver Beech Capital stated the following regarding Crocs, Inc. (NASDAQ:CROX) in its first quarter 2024 investor letter:

“In October 2023, we invested in Crocs, Inc. (NASDAQ:CROX), the manufacturer/retailer of iconic foam casual footwear, at an attractive mid-teens FCF yield. Crocs is a well-managed, capital light, high margin, growing consumer-favorite brand.

We believe a combination of cognitive and institutional biases prevented the market from correctly evaluating the company, including anchoring sales expectations to the company’s pre-pandemic sales volume, overextrapolating sales slowdowns at the company’s relatively small HeyDude subsidiary, and focusing on questionable short-term oriented alternative data. The market misunderstood (and perhaps still does) the company’s growth profile, earnings quality, and earnings power. In the year ahead, we forecasted there was a straightforward path to Crocs posting strong near-term topline and FCF growth while deleveraging.

After a few months, the market agreed with us that Crocs was simply too cheap and quickly rerated the company. The Fund does not own a stake in Crocs today. The Fund’s investment in Crocs generated a 248% gross IRR / 40% total gross return over our 4-month investment period.”

A busy retail store full of customers trying on a wide range of footwear.

Crocs, Inc. (NASDAQ:CROX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held Crocs, Inc. (NASDAQ:CROX) at the end of the fourth quarter which was 41 in the previous quarter.

In another article, we discussed Crocs, Inc. (NASDAQ:CROX) and shared Choice Equities Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.

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