First buy sentiment in 132 posts, since 80838.
Where have all the buys gone?
In addition to all the other negatives that have been mentioned, I have noticed that people are starting to get more health conscious. Even the government is tooting that obessity is one of the big problems in this county. The health costs of obessity is in the billions, not to mention early deaths and less energy both mentally and physically.
The cost of eating to many unhealthy products like donuts is you enjoy now and pay later.
Yes, I agree with Divursify's analysis. It's not a matter of a few millions, it's a gross overstatement of earnings combined with an astute investor's relations machine.
We are coming back to basic questions, that should have beend asked long time ago:
"Why is the cashflow so poor and why has the balance sheet deteriorated the way it has?"
Toleandsion: Divursefi's analysis, still in progress, indicates expenses may be understated (and earnings overstated) to a very significant degree: as much as $40 million in the past nine months.
You said: "If some negative news comes out and the stock falls further..."
Let me correct you:
The only question is:
When does the negative news come out?
With the change in CFO, it can be expected to hear sooner rather than later, surely before the the end of the fiscal year. So lets wait and see what the month of January will bring us.
I am braced for another 25% drop to a share price of around $ 25.-, unless the news is more than a warning on earnings. Then we could see $ 10.- to 15.- within a couple of months.
Do the institutions hold on during such a fall?
ussually not. so where is the bottom?
Only credible accounting and substantial growth rates - both may need 6 to 12 months to establish - will bring us back to a P/E ratio of 20 to 25.
Simple calculation means:
If we are lucky, we will see KKD recover to a share price of around $ 20 to 25 by mid 2005.
Divursefi, I would think it's pronounced "failin", not "fallon". We'll listen carefully when Scott introduces him in the conference call. Of course Scottie has that North Carolina accent thing. Maybe someone should just call up Mr. Phalen's office and ask listen to how his secretary pronounces his name.
33 years old. They probably like to hire them when they're younger and more malleable. Then they can mold them in the Krispy Kreme way. Scottie himself was only a whippersnapper when he came on board.
no doubt Phalen's first major mission will be in the area he comes from: raising new capital. Raise enough of it and they can tell Wachovia Bank (and maybe Mr. McCoy) to take a hike. However, the ripe moment for a secondar offering may be passing. Were KKD at $43, the announcement of impending dilution might take it to $36. But if this drops to $30 or $28 before young Phalen is ready to go, then the dilution effect could knock it to the low 20's. Meanwhile Randy Casstevens is probably planning to sell his stock next Monday morning.
Be careful in buying this until you have done your fundamental homework .Bad news will be part of the unraveling of this promo/fad stock.This will act like a great big Glazed snowball gaining more size and weight as it drops. The resignation of Randy is probably the first in a line. Would not be surprised to see the new " miracle worker" also resign within a short time when he sees the dimensions of the problems. Be wary and Merry Christmas
<If KKD is so great and the product has no negatives, why has it fallen from a high of $49.74 just 4 months ago? That's a 26.5% drop. Over 1/4 of its value. >
Pardon me for stating the obvious but ... maybe it got ahead of itself? Growth stocks go through fairly regular corrections of this magnitude. And KKD has more than tripled through one of the most grizzly bear markets in a generation - even after its recent slide. This is remarkable performance. Change your chart from "6 months" to "3 years" - it might give you a new perspective. The fact that some started seeing the stock through rose colored glasses and pushed it beyond where the market could comfortably price it is not unusual or particularly noteworthy. I personally think that it is getting back to a price level where it is more interesting. My point was and is - to think that the Atkins diet is a major factor for KKD now or in the future is a longshot (IMHO) and I wouldn't bet fifety cents on it.
I am not an unabashed bull on this stock. (Here comes full discloser) In fact, I currently don't own any shares. If some negative news on the stock comes out, and the stock falls much lower, I may "buy the fact", however.