Betting on Animals

The skepticism over high multiple footwear stocks seems to be gaining a little traction.

Chad Brand submits:  As you may have noticed, 2006 has been the year of the consumer IPO. Familiar and popular consumer brands have debuted on the public market to much fanfare. Names like Chipotle Mexican Grill (CMG), Crocs (CROX), Mastercard (MA), and UnderArmour (UARM) have all made investors a lot of money. Of that group, Crocs is really the only one that I looked at and said to myself, “Boy, that will be a great short when the fad dies and the stock’s momentum dies down.” Seeking Alpha

The aptly named Mr. Brand seems to be trying to talk himself into taking the short side in this Battleground. Courage is certainly needed if you are the type to sweat every tick.  CROCS (CROX-NASDAQ) bears are a secretive clan...as of November 10th, 43% of the float had been claimed by the bears, but we have yet to meet a soul who will admit being short the name.

But with nearly $550 million worth of stock borrowed, someone has a big bet on. Perhaps ‘07 will bring them a measure of redemption. Or not.

Short interest will be updated in a little over a week.We would bet that CROCS is still pretty crowded. The shares recently absorbed massive insider sales quite well, and we are looking for at least one more spasm of buying before they can hope to slink away intact.

While it is nice that Chad told us the stock is richly valued, what we really need from him is a perfectly timed entry on the short side.

Until you have an edge, taking a position is just a gamble.

Speaking of gambling…

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