We keep an eye out for companies that are truly struggling and may be headed for disaster. Stocks on are watch list are typically losing money, filing for bankruptcy or fighting to survive. We urge investors to do their homework when a company reaches this stage. Crocs is the classic story of a company unable to capitalize on a single product that earned its initial success.
It wasn’t so long ago that plastic shoes were the “in thing.” Known for its clogs, Crocs and its signature product were the frequent target of ridicule and satire. Despite celebrity endorsements and enthusiastic early sales, the company was unable to compete with other manufacturers’ athletic shoe offerings, leading to the closure of more than 150 stores in 2018. The company also eliminated some of its brand offerings, shut down most of its international manufacturing infrastructure, and added a sandal to its product line.
Rating: Smells Like Trouble