Krispy Kreme Doughnuts
(
KKD
) sees the Zacks Consensus Estimate move higher and gets good price
appreciation with positive earnings surprises. The stock is a Zacks
#1 Rank (Strong Buy).
Company Description
Krispy Kreme Doughnuts, operates as a branded retailer and
wholesaler of doughnuts, complementary beverages and treats, and
packaged sweets. KKD sells approximately 20 varieties of doughnuts,
including various Original Glazed doughnuts, as well as coffees,
espresso, cappuccino, hot chocolate, frozen drinks, juices and
other beverages.
Earnings Estimates Increase
Earnings estimates for the April 2012 quarter have moved higher
recently. The Zacks Consensus Estimate of $0.07 increased to $0.08
in January, an increase of 14%.
The same is true of the July 2012 quarter which indicates sustained
growth in earnings. Growth in earnings is something that most
aggressive growth investors search for.
Earnings Surprises Have Helped
A string of three straight earnings surprises have resulted in nice
price appreciation. A big beat of $0.04 in the January 2011 quarter
netted a 30% move in the stock. That beat was 44% ahead of
expectations. The July 2010 quarter also saw a significant move in
the stock, up 24%, after posting $0.04 in earnings when the Zacks
Consensus Estimate was calling for a loss of a penny.
Be Mine
The company recently announced that it is offering "sweet one-of-a
kind treats" to share with your special Valentine. Nothing says
Valentine's Day like a doughnut with sprinkles on it.
Another, potentially more attractive option is to purchase a dozen
doughnuts that come with a dozen Valentine cards. The real
sweetness of this deal is that each card is good for one doughnut
of your choice. It's the gift that keeps on giving.
Valuations
KKD trades at a premium to industry averages, with the conservative
measure of price to book among the largest of premiums. 5x book
value suggests that the company has very few or very valuable
assets, or quite likely a combination of both. The industry average
for price to book is 2.4x.
The Chart
The recent price action has shown a key move above the 200 day
moving average line. Over the last 3 months, the stock has moved
higher by almost 12%.
Brian Bolan is an Aggressive Growth Stock Strategist for
Zacks.com.
This Week's Aggressive Growth Zacks Rank Buy
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KRISPY KREME (
KKD
): Free Stock Analysis Report
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