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Should Investors Bite Into Krispy Kreme Stock?



June 04, 2014 – Comments (0) | RELATED TICKERS: KKD , DNKN , SBUX

Shares of world-famous doughnut purveyor Krispy Kreme Doughnuts (NYSE: KKD  )  were a huge success story in 2013, shooting up 175% over the course of 11 months. However, in December of 2013 and so far in 2014, it seems that Mr. Market is intent on, frankly, "Krispy Kreme'ing" the company's stock, sending it downward almost 30%. 

KKD data by YCharts

Now that Krispy Kreme has opened up the fiscal first quarter with a poor earnings report, is now the time for investors to "bite into" Krispy Kreme stock, or is the market correctly turning down the heat on a potentially overheated stock? I believe the downward trends for Krispy Kreme may signal caution for prospective investors as the company needs to show that it can generate sufficient cash flow to grow the business. Krispy Kreme was an overvalued stock in 2013, and it remains so today.

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