The S&P 500 Broke A Key Technical Level

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, The S&P 500 Broke A Key Technical Level The S&P 500 broke its key technical level (50-day moving average) for the first time in more than three months, marking a bearish signal of the market. You can see it in the chart below: (Source: Bloomberg) What was the catalyst behind the drop? That’s a trick that mainstream news loves to make. They would guess something that is behind the market’s decline, but there are far more catalysts at play. Maybe it is just a breather from a long rally. Or maybe it is the beginning of a bear market. Nobody knows. Regardless, retail sales jumped more than forecast. This paints a picture of a strong economy that probably can withstand higher rates. More importantly, Fed officials may be hesitant to begin cutting rates. Plus, Fitch warned that it may downgrade JPMorgan Chase, Bank of America, and other big lenders. - “The most recent data — retail sales — shows the economy is still hanging in pretty well,” said Rhys Williams, chief strategist at Spouting Rock Asset Management. “Clearly the economy is better than anybody expected six months ago. A comment from a Fed official: Minneapolis Fed President Neel Kashkari said inflation is indeed coming down, but “it’s still too high.” And he hinted that rates could rise if inflation isn’t under control. That leads to his comment that he’s in favor of “significantly further” capital regulation on regional banks. Why? He believes that rising rates will bring even more losses to regional banks, meaning that they are not out of the jam yet. - “Right now it seems like things are quite stable,” Kashkari said. “The risk is that if inflation is not completely under control, and that we have to raise rates further from here, to bring it down, that they might face more losses than they currently face today. And these pressures could flare up again in the future.” Minneapolis Fed President Neel Kashkari (Photo: Stephen Lam/Reuters) We will get earnings reports from the largest retailers this week. Home Depot beat expectations on earnings per share and revenue. So, we will see whether Target and Walmart can match Home Depot with solid results. Executives’ comments on the state of consumers will also be in the spotlight.  Could This Stock Be A Ten-Bagger Over The Next Decade? Today’s Stock Pick: Crocs, Inc. ([CROX]() Surely, you’ve seen a pair of Crocs before. Maybe you even own one. This classic clog was born in 2002 and became a fashion icon for its comfort and unique look. As a result, the company had the largest footwear IPO in U.S. history in 2006. (Photo: Crocs) However, the business went downhill between 2008 and 2013. Crocs over-diversified its product line, and one of its mistakes was trying to enter the golf shoes business. It ignored its iconic clog and its brand relevance declined severely. Lastly, it overexpanded its global retail fleet to 600+ stores in 2013. All in all, it led to Crocs’s SG&A ballooning to a whopping 47%+ of revenues! Time for a transformation. Andrew Rees became the CEO of Crocs, and his transformation was nothing short of remarkable. He killed 50% of the company’s SKU and focused on high-margin products like clogs, sandals and Jibbitz. By the way, Jibbitz is a genius product. It is the “charms” that people can plug into their crocs. For example, kids could buy Harry Potter and Pokemon charms for their own Crocs: (Source: Crocs.com) Each set could cost as much as $19.99, giving Crocs an extra income stream with insane margins. Result? Crocs posted double-digit revenue growth annually since 2018, hitting a new revenue record of $3.5 billion in 2022. Its operating margin was incredibly 30.3% last quarter. And the company has about $1 billion remaining in its share repurchasing program. (That is about 16% of its current market cap of $6 billion!) A huge acquisition: Andrew Rees, the CEO, wasn’t done putting his magic touch on Crocs. He made a huge acquisition by buying HEYDUDE for $2.5 billion. The purchase was closed in February 2022, and it was controversial due to its price tag. How much was it? Well, the price tag was about 3.5 times HEYDUDE’s 2022 revenue. But Crocs is confident that it can turbocharge HEYDUDE’s growth through its distribution know-how and a massive customer list. Already, it announced that HEYDUDE has a $1 billion revenue target for 2023. Now, let’s talk about Crocs’s margins. The recent quarter showed a gross margin of 58.1%. That was bigger than Nike’s margin of 40%’s. And its operating margin was 30.3%, making Crocs a wildly profitable business. (Source: Crocs) Crocs has a huge revenue ambition, setting a target to hit $5+ billion by 2026E. What is Crocs’s gameplan? Besides growing its Sandals by 4x and doubling Jibbitz revenues, Crocs is focused on expanding its footprints in the Asia Pacific region. A big part of Crocs’s recent quarter’s growth came from Asia Pacific, and China revenues grew triple-digits in the secodn quarter: (Source: Crocs) Lastly, Crocs is far from a high-growth company with zero earnings. No. It is already profitable. It earned $212 million on a $1.07 billion revenue in the recent quarter. The company recently raised its EPS outlook for next year to be between $9.95 to $10.30. A $10 EPS would imply a 9.8 P/E for a company with two enviable traits – growth and profitability. Bottom line: Crocs has everything an investor would dream of – strong growth and high profitability. Wall Street is skeptical of this stock because of its pandemic boom. Regardless, the stock is trading at just 9.9 P/E which is a bargain if the company simply holds into its gains from last year. This stock could be a sensational winner over the next decade, so it’d be wise for you to buy this stock while it is cheap. [CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS](       © All Rights Reserved, Trade Alliance If you no longer want to receive these messages, you may [click here]( to unsubscribe.