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Krispy Kreme Doughnuts, Inc. Message Board

  • surfwtw surfwtw Feb 11, 2011 12:39 PM Flag

    Price to Book Ratio

    Why is KKD trading at a 6.36 price to book ratio? The industry average is 2.64. I know that it must mean people believe in the growth of the company but isn't that really high? Just looking for an explanation. Thanks

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    • A lot of their locations are franchised ... ie: not on KKD books.

      Depends on where the 2.6 multiple comes from and the "model" for them in terms of locations.

      Also, possible that their company locations are rented (not owned)??

      In other words, KKD just might not have the physical assets that the peers you infer about have.

      Lastly, maybe their locations (if owned) have been there so long that they have already been depreciated. Doubt this is a biggie though in terms of your question.

      Just a thought.

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