Trevor Scott
Founder & Portfolio Manager of Tidefall Capital Management
Crocs is cheap enough to be a takeover target for Deckers or private equity: 2026 EPS guidance of $13.20-13.75 puts it at about 7.3x adjusted earnings, and it bought back 10% of shares over the past year. It beat and raised, with the Crocs brand down 1% and HeyDude down 13% in a reset. Skechers was bought out last year at 8.6x EBITDA, equal to $144 for Crocs. A 30-40% premium could suffice since management lost credibility after overpaying for HeyDude. x.com x.com x.comÂ
Deckers Outdoor is a decent safety play as a very profitable business trading at a low multiple, now with a buyback authorization of up to 33% of its market cap. Growth was somewhat slower than expected and guidance is mediocre, but a return to growth could make the stock jump. x.comÂ
Deckers' lowered FY27 revenue guidance adds evidence of slowing growth behind the value-trap concern. Guidance is now $5.70B-$5.725B, down from $5.86B-$5.91B and below the $5.88B estimate; the stock trades at about 10 times next-twelve-month earnings. x.comÂ
Deckers, Nike and Crocs are too hard to own as buy-and-hold investments because fashion needs constant babysitting, and there are easier ways to make money. That holds even as @teechongyen notes Deckers has been shrinking its share count with rising free cash flow and trades at about 12.5x forward earnings. x.comÂ
Deckers Outdoor is the pick among beaten-down athletic brands, as it is likely buying back 5-10% of its float at these levels. x.comÂ
On Holding is the better business to own: when you can pay a few more turns of valuation for higher growth, don't think twice. Deckers, which Michael Burry killed, is the contrast. x.comÂ
Deckers looks exposed to sector-wide discounting, as a struggling Nike is about to drag down the whole footwear sector with promotions. The lowest Street price target on Deckers was cut to $70, a bad sign, since an analyst is unlikely to turn bearish without good information. x.com x.comÂ
GFL Environmental is a high-quality stock worth holding indefinitely, which is why the take-private news is unwelcome: when quality stocks stay cheap long enough, private-equity buyers circle. Which firms are interested is unknown, despite mentions of Apollo, Blackstone and KKR. A buyout would interrupt long-term compounding with taxes. x.comÂ
Lululemon is cheap at around 11x earnings with gross margins above 50%, while many people, including the founder, are pushing for a turnaround. Sales growth is tiny, but the balance sheet is solid and the company makes an interesting acquisition target. The reported collapse of talks with founder Chip Wilson, per WSJ via @DeItaone, looks good for the stock: Wilson may try to take it private or bring in a strategic buyer. x.com x.comÂ
