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OklaBoston (59.20)

Dunkin' Donuts IPO



October 03, 2011 – Comments (2) | RELATED TICKERS: DNKN , KKD , SBUX

This is one IPO that might not fall below it's IPO price, though it probably will since most people who don't live in New England have never heard of it. As a regular customer of a branch near where I live, however, I expect this chain to have customer loyalty right up there with Starbucks, maybe even higher.

The product  is right up there with Starbucks' in quality, and the stores are less pretentious. the prices beat Starbucks by a large margin.

The chain is expanding slowly, I would guess  in an effort to keep expenses from rising too quickly.

Usually I would enter an "Underperform" pick  on a stock this newly public, but not this one. I'll be going the other way sooner or later however. The only question is when. 

2 Comments – Post Your Own

#1) On November 11, 2011 at 8:52 PM, OklaBoston (59.20) wrote:

Something worth mentioning that I didn't know when I posted my blog entry is that only 18% of the company was sold at the IPO. A good indication, IMO, that the insiders don't want it to fall under the control of a leveraged buyout outfit that would load it up with debt to make a quick profit.

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#2) On November 26, 2011 at 12:33 PM, OklaBoston (59.20) wrote:

Just used my pocket calculator to come up with a price at which I would consider giving this an "Outperform" pick. Without going into the details of my assumptions, that price is $13.00.

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