Seven months ago, we published an analysis of Crocs (CROX) titled "Is the Ugly Shoe That Ugly?" The stock was trading at around $89, the market narrative was poisonous, and the numbers were screaming something different from what the consensus wanted to hear/believe. The forward P/E was around 7x, the FCF yield was a staggering 16-17%, and a Sum-of-the-Parts valuation that assigned zero value to HEYDUDE still produced a fair value of $127 per share. The implicit perpetuity growth baked into the stock price was -4%, which essentially meant the market was pricing a company in permanent decline. Seven months later, with the stock trading around $137, hitting a new 52-week high, the answer appears to have been the former. But that answer, paradoxically, is precisely the reason this follow-up article exists, because the same discipline that told us to look when nobody wanted to now tells us to be cautious when everyone is suddenly interested.
Value
AI PANIC: THE BINARY INVESTMENT OPPORTUNITY
We've seen this movie before with different players, AI instead of the internet, language models instead of digital cameras, but the behavioral script is identical. The market is pricing extinction across a broad swath of businesses where the actual probability of survival could be high for some of them. AI will disrupt industries?" for sure, but the question is which companies has the market condemned to death that will actually survive.
CROCS, IS THE UGLY SHOE THAT UGLY…?
Often, the market passes judgment based on recent and easy narratives ("it was a passing fad," "the HEYDUDE acquisition was a disastrous mistake"), partially ignoring the business fundamentals. Currently, Crocs stock has corrected sharply and trades at a valuation that suggests a bleak future, almost one of disappearance. However, if we look beyond the noise, the numbers tell a very different story...
CAPM, ¿SÍ O NO?
El Capital Asset Pricing Model (CAPM) es, probablemente, el modelo más influyente —y cuestionado— de la historia de las finanzas modernas. Su fórmula, tan simple como potente, ha servido durante décadas como punto de partida para valorar activos, estimar el coste del equity y evaluar carteras. Pero hoy, más de 60 años después de su nacimiento, las preguntas se acumulan: ¿sirve todavía? ¿Debe seguir enseñándose en escuelas de negocios? ¿Es útil o solo elegante?
EBITDA…¿SÍ O NO?
Durante décadas, el EBITDA ha sido el atajo favorito de muchos analistas para estimar la rentabilidad operativa de una empresa. Pero su uso generalizado ha generado también graves distorsiones: ignora la inversión necesaria para sostener el negocio, puede inflar la percepción de liquidez, y es fácilmente manipulable...
ROC, ROIC AND ROE by DAMODARAN
La clave para entender la creación de valor en una empresa no está solo en medir cuánto gana, sino en cuánto gana en relación con lo que invierte y con el coste de esa inversión. Las métricas tradicionales como ROIC, ROE y ROC, aunque populares, deben ajustarse cuidadosamente para eliminar sesgos contables y reflejar fielmente la realidad económica.
Contrarians by Choice, Herds by Design
"Be a contrarian." It is the whispered mantra in trading rooms, financial forums, and among many investors who take pride in it. It sounds sophisticated, daring, and hints at the secret to outperforming the market. It evokes images of lone wolves bravely defying conventional wisdom to uncover hidden gems and achieve extraordinary returns. But is this contrarian ideal a true reflection of market reality? Or is it, instead, a more complex and paradoxical dance between individual conviction and collective influence? Every investment decision is simultaneously a contrarian act and an adherence to the herd. Let’s explore this seemingly contradictory truth.
QUALITY GROWTH INVESTING: DOES IT WORK?
Drawing on the principles outlined in Peter Seilern's Only the Best Will Do, it seems evident that quality growth investing represents a refined and resilient approach to wealth creation. By focusing on companies with sustainable competitive advantages, robust financial health, and consistent growth trajectories, investors can achieve superior returns while mitigating risks inherent in volatile markets. Quality growth investing has shown (at least in the last 5 years) that true investing success lies in consistently backing the best.
QUALITATIVE VALUATION – WHY THE TOP MANAGEMENT MATTERS MORE THAN YOU THINK
Are you relying solely on financial statements for company valuation? You might be missing a critical piece of the puzzle. While balance sheets and income statements provide essential data, they often overlook the profound impact of top management on a company's true worth. This quote by Peter Seilern, "A company is always as good and only as good as its top management," from Only the Best Will Do, isn't just a catchy phrase, It challenges us to look beyond the numbers and recognize that the quality of leadership is a critical determinant of a company's success and valuation.
Valuing Companies: Beyond DCF Models
💡 Why stick to one perspective when valuing a company? While DCF models provide crucial insights, they’re not the whole picture. This video unpacks the limitations of DCF and stresses the importance of a multi-faceted approach—one that accounts for both quantitative and qualitative factors. Understanding a company’s true value goes beyond numbers; it’s about seeing the … Sigue leyendo Valuing Companies: Beyond DCF Models
Irrational Investors 