Krispy Kreme Doughnuts Inc (NYSE:KKD)

Deferred taxes will cut into profits over the near term. I think it is a little overvalued at this price, though a great company right now.

The show is over, now time for a dose of reality.

Great turnaround story, solid management, and excellent growth coming up with plenty of room to expand.

Furthermore, doughnuts seem to be crossing through cultural borders as the company is doing well in Asia and the Middle East (though it helps that Kuwait's Al Kharafi family owns a 12% equity stake and bankrolling some of the expansion). Barely any penetration in Latin America and nothing in Europe so far.

And besides, they're doughnuts. Who doesn't like doughnuts? It's a guilty pleasure.

Slow steady growth, almost twice the cash than debt owed, expanding to new international markets, relying on its iconic brand name and method of grand openings.

Solid expansion plan. Seem to have solid numbers. Undervalued right now, outperform.

Stock price seems to be on a roll.

The spelling says it all.

KKD is making a comeback

KKD is turning its business around after a long slump, and is undervalued relative to the S&P.

Krispy Kreme Doughnuts is currently trading at $9.03 a share with a MKT Cap of just under 600 million. The fundamentals are outstanding on KKD, 3.98 PE, EPS $2.27, ROE of 95.9%(phenomenal) and a PEG ratio of 0.72. Couple all this with low debt, which has been cut in half over the last 5 years and almost $50 million in cash make the financials of this company fantastic. Krispy Kreme currently has over 500 stores in 36 states, and 15 countries, specifically growing countries such as India. I believe this stock wil with out a doubt, prove to be a homerun in the next 5 to 10 years.

Embezzling CEO is gone. As the economy continues up, people will sart buying things that they want and don't need. Who doesn't want a donut?

Liquor, gambling, beer, Krispy Kremes. Throw a couple of cigarettes in their and you have a road map to a cushy retirement. Invest in human nature and you will rarely lose money.

Plenty of profitable quarters. Extremely low P/E. Expanding abroad. Seems like a CEO with a financial background is exactly what this company needed. Fairly low down side if I'm wrong.

If there was ever an example of an Income Statement that should be ignored, this is it. Skip straight to the Cash Flow Statement, which strips out all of the one-time lumpiness that the Income Statement is supposed to smooth over. Judging by FCF/Sh, this company might just be turning itself around. The Balance Sheet has really improved as well. I'm going out on a limb here, but I do like me a doughnut!

Mmmm... donuts that melt in your mouth...

"May the Kreme Be With You" convinced me it's on the rise

I worked with Jim Morgan at Interstate/Johnson Lane for years. Believe me; He is a very smart man. He is one of the smartest CEO's on Wall Street today. Len Holliday lenholliday@yahoo.com 864-940-2470

sjm

The 25% share gain following KKD's Q1 earnings announcement was not a flash in the plan. They've downsized and transformed their operations, have a business model that now works and are poised for significant, profitable growth.