We’ve had good luck trading Crocs (CROX) over the past nine months, and the footwear maker continues to fire on all cylinders.
An article in The New York Times this week reiterated just how popular Crocs have become since the pandemic, with sales of the shoes nearly tripling since 2019.
“Like Peloton, Etsy and Zoom, Crocs saw its business boom during the early days of the coronavirus pandemic. The company’s aesthetically questionable but easily slipped-on clogs were the perfect footwear for Americans puttering around their homes, gardens and kitchens during quarantine.
“But while many people got off their exercise bikes, cut back on D.I.Y. arts projects and resumed in-person meetings as a sense of normalcy returned to the world, they have kept their Crocs on.”
The company projects revenue from its signature rubber clog line will exceed $5 billion in three years, representing a nearly 90% increase, and that adjusted operating margin will hold steady at around 26%.
Today, we recommend selling an April monthly put for a large chunk of cash. We’re going with the monthly expiration for liquidity reasons and a 107 strike that is 8% out of the money. That’s a level the stock hasn’t seen since early January.
Current Stock Price: $116.40
ACTION: Sell to open CROX Apr Monthly (4/21) 107 Put for around $2.65. You can go as low as $2.45, but please don’t start there and always use limit orders.