On the way back from a long-planned family trip to Vail last weekend, we stopped in to shop at a Crocs (Nasdaq: CROX) store. I'm writing about it because I'm surprised by what I found, enough so that I've decided to make a bullish CAPScall on the stock.

Longtime readers will be surprised by that last phrase. I have an ugly history with Crocs. Three times from 2006 to 2008 I made calls in CAPS, and each time I came up a loser. My worst call came in September 2006, when I rated the stock to underperform.

"Going back to the well on this stock. I realize it's the new new thing in footwear but the secondary offering, which is designed only to enrich management and its pals, tastes about as good as spinach-flavored ice cream. (With, or without, the e coli.)," I wrote at the time.

I closed the position in May 2007 at a near-50% loss, after the stock had risen to $28.33 a share. If only I'd had the guts to double down on my short-side call ahead of a sharp sell-off the very next year. Alas, I didn't.

Why this time is slightly different
As much as I've been bitten by the resin croc, you might think I would want nothing more than to distance myself from Crocs. And yet I've been a customer for years. Our weekend visit to the store was to replace my broken pair with an updated style.

I'm thus far delighted with what we settled upon: a brownish pair with suede tops that look like business shoes when worn with khakis. Adjustable straps for the heel make the design especially comfortable. But they weren't cheap, running about $50 for the pair.

As a buyer, I'd prefer a discount. But as an investor? I had to marvel. Crocs has established pricing power on par with premium peers Deckers Outdoor (Nasdaq: DECK) and Nike (NYSE: NKE). Indeed, you might be surprised to learn that, of the three, it's actually Crocs that boasts the best gross margin.

And that's important. We've long presumed that Crocs was a fad, and that the concept wouldn't last without attracting a broader customer base. Not so. By employing greater creativity within the popular options it does have -- adjustable backstraps for men's shoes, for example -- Crocs has been able to reignite growth and return margins closer to where they were in 2007, before the crash.

Does that make the stock a buy? Honestly, I'm not sure. But with Crocs stock selling for a fraction of the 18% annualized profit growth analysts expect over the next five years, resulting in a PEG ratio of just 0.67, there appears to be more upside than downside at current prices. And that's enough to get me in with a long-side CAPScall.

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