SNAPPY garment manufacturer Crocodile is a stock with plenty of upside. With shares closing at $1.14 on Friday, they offer a dividend yield of 6.8 per cent and are trading at a cheap 8.7 times 1993 earnings.
However, investors should beware - the croc might bite back. The company's recent results were disappointing and shares price performance has been uneven. The company will experience slower earnings growth than competitors such as Giordano and Gold Lion.But given Crocodile's cheap share price, its shares are relatively more attractive.
Following the management's rationalisation of operations, the company is well-positioned to benefit from strong sales to the US and robust sales in China.
Last year, profits before extraordinary items slid by almost 50 per cent to $55.5 million.
For fiscal year 1993 brokerage Morgan Grenfell is predicting a 30 per cent rebound to $72.6 million. Profits are expected to increase by more than 20 per cent to almost $88 million in 1993.
The company's main money spinner, garment sales in Hongkong, is expected to increase thanks to a broadening of the product line.
The company has increased its label products.
