A stylish stock to play China

Even after rising 100% in the past year, footwear maker Deckers could double again if it taps into the Chinese market.

By Jim Cramer Nov 8, 2010 9:41AM

jim cramerMaybe Deckers (DECK) is finally getting its due. Barclay's recommendation Friday finally tells the story that this high-growth stock does not deserve to sell at 13 times earnings if you back out the cash.

 

Deckers has always been viewed as a fad stock because of its Uggs line, which is always supposed to be one quarter away from stalling out. But Barclay's makes the point that not only is it unlikely to stall out, but it might be accelerating with international growth. It's got only 2% of its sales in China, and the Barclay's piece speculates that China could be a huge market for the company, something I agree with.

 

Plus, Barclay's was willing to say that Deckers isn't just a one-product brand. Teva is a huge reignited business, and it isn't even factored in to the equation.

 

Me? I have liked this stock so much that it was one of my original CANDIES -- Chipotle (CMG), Apple (AAPL), Netflix (NFLX), Deckers, Intuitive Surgical (ISRG), Express Scripts (ESRX) and Salesforce.com (CRM). I have since removed Express Scripts and Intuitive Surgical for lack of growth and replaced them with F5 (FFIV) and Amazon (AMZN).

What always amazes me is that, even after this run -- the stock has gained just over 100% in the last year, with a 3:1 split in July -- Deckers has such a small market cap at $2.4 billion.

 

I believe it could double, given the outlook and the Chinese possibilities. Haven't missed much if that's the case!

 

At the time of publication, Cramer was long AAPL.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Click here to follow Cramer's trades for his Charitable Trust.

 

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