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Krispy Kreme Doughnuts, Inc. Message Board

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  • glsierra glsierra Jun 3, 2010 4:36 PM Flag

    KUDOS to MANAGEMENT!! great Q!!!

    Dont get ahead of yourselves all. The numbers can be a little misleading.

    This jump is short-covering based, not based on the fundamentals of the release.

    Sales are basically flat over last year. The EPS gain (which is nice) is mostly driven by the debt reduction since last year.

    I am disappointed that they only paid down about another $1million or so of the longterm debt (from about $43m to $42m). I was hoping that would be closer closer to $3m or $40m total debt.

    6c is what I said it would come in at about a week ago. This roughly implies a P/E 16.

    I bet the stock will continue spike in the morning with more short-covering (gotta love those idiots).

    But dont look for stratosphere jump to $5 or anything like that. But then also expect a slight selloff as those who bought in between $4.50-$5 to cover their losses and leave.

    Wont spike sustainably past $5 until probably after the next quarter release.

    $6-7 by end of calendar year is my forecast.

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    • of course the jump is related to fundamentals--they beat the street estimate and raised guidance!

      • 1 Reply to bluebloodedtrader
      • There is no "concensus" estimate. No one is covering the stock. Yahoo Finance has it wrong.

        Bottom line, go back and look at the #s. Debt reduction yielded a $1.8million. That takes up the huge lionshare of the net income increase of $2.6m. Also consider that sales continued to decline albeit at a slower pace! =)

        You cannot just look at an EPS # and say "oh, they're doing great!". If you do, watch out for the proverbial fool and his money will soon part.

        That said, the business is improving! That is positive. But still a long road to plow.

        I really want to see them take debt reduction much more seriously. $42m is too high for this company.

 
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