Getting under these Skins

America loves an underdog. Sylvester Stallone knew this when he wrote Rocky.

Investors are no less susceptible. Backing a young, unproven company with no revenues amounts to fiscal suicide. Who wants to drink the Kool-Aid™ and go along with the brethren when there are growth and revenue monsters like Research in Motion and Apple out there?

It is, of course, a combination of hope and greed that lures investors to stocks like Hoku Scientific, Northwest Biotherapeutics and Dendreon. While Dendreon has a potential breakthrough treatment for prostate cancer, manufacturing of Provenge is likely two years away, possibly one year away if fate is kind. Northwest Bio, at least, has limited approval to sell its brain cancer immunotherapy treatment in Switzerland.

Hoku Scientific has plenty of doubters, but the $1.2 billion in polysilicon contracts with companies across the globe is nothing to sneeze at. Just one month ago, all three of these companies traded at less than $10 per share. HOKU bloomed from $4.50 to a recent high of $14.55 thanks to the news of the contracts.

That leads me to a company that more than a few members of the Church of Crocs have knighted as the Next Coming of Footwear. Buyout candidate? Never say never with a Co like Crocs, which is guided by acquistion-mad gurus.

Skins Inc. was a penny stock, still is by some definitions. Without selling a single pair of shoes, SKNN.OB has sent investors on a roller-coaster ride of pain and joy in the past year.

Steven James, a writer who is long in Skins, captured the long voyage in his piece for Seeking Alpha. James writes that delays have killed investor faith twice already, but those who left were quickly replaced by a new flock of buyers. SKNN.OB fell all the way to $0.76 after the most recent delay, but has rebounded and trades above $2.

All eyes in the footwear industry will be on Skins when a World Shoe Association conference begins on July 30. (Yes, July 30 is a weekday. A Monday, to be exact.) That begs the question to those of us who are long in CROX: Is Skins worth a minor position in our portfolios?

And another question follows: If the answer to question 1 is yes, then will it be too late, to pricey to buy SKNN.OB after the two-day conference? They are questions worth asking — by CROX longs and small-cap hunters — because CROX has already quadrupled its stock in the past year, and another quad is unlikely, at least in the next 12 months.

The slick marketing site of Skins definitely has its pluses, but until the product is actually in stores, I can't help but think: At 76 cents, worth a small gamble. At $2, no thanks.

A little more digging may reveal whether Skins, underdog or not, will be worth wearing.

Disclaimer: Pupule Paul is long CROX and has no position in SKNN.OB.