Long-Term Potential at Crocs

Investors should also note that the days-to-cover number has come down a lot this year, owing to a combination of less shorting and increased trading volumes. The days-to-cover number indicates how long it would take to unwind the total short position in a stock, based on the average daily trading volume.

Crocs Short Ratio
Date	Days to Cover
3/15/2007	3.46
2/15/2007	6.13
1/12/2007	9.46
12/15/2006	6.68
11/15/2006	7.16
Source: Nasdaq

Ahead of Crocs' expected earnings report about a month from now, I wouldn't be surprised to see shares trade higher on expectations for above-consensus earnings and for management updates on the second-half release of diversified product lines aimed at reducing the seasonality of sales.

Naturally, investors should probably expect to see any gains shadowed by a rising short position on hopes for an earnings stumble and valuation concerns, but that hasn't stopped shares of Crocs from pushing higher over the past year.