Shorts could pick almost any stock in this market and make money, except KKD. And any short who has been lucky enough to a time a dip of KKD right certainly could have made much more shorting something else.
I'm gonna let everyone in on a little secret. I knew KKD was going to beat estimates last quarter because the analysts hadn't figured in the savings from the refinancing they did early this year. Guess what, analysts still haven't raised their EPS estimates for the 2nd quarter, meaning it would be amazing if they didn't beat again. Now consider that the headline number is going to be absolutely huge because of the sale of equity in the Brazilian stores. Yes, they will report an ex-items number too, but does anyone remember what happened when they missed by alot on the headline number in Q4? The stock dropped 2 bucks and everyone panicked.
Current estimate is .06, add .02 from the interest savings and add .06 from the Brazilian sale and you have a .14 EPS headline and .08 ex-items minimum. A beat like this, or possibly even more from positive business momentum, will set off a positive news cycle that will have people scrambling to buy in.
These estimates don't even factor in things like a buyout offer or their coffee initiative, which to be honest could be their biggest growth driver in 2012.
As someone who has owned this stock for a good while now, I'm doing my best to stay level headed and remain calm about the potential here. I think a pullback is possible, but I don't see it going below 8 with the strength it has shown in the face of the recent market swoon. My year end target is 14 based on the direction the company is headed, and higher than that isn't out of the question.
I agree and have been using that fact to make some dough (pun intended) over the past 2 years or so.
There's also a motivation among analysts to not rain on a turnaround parade when they pick up new coverage. .... So, they -in aggregate- maintain "conservative forecasts". Expect the analysts to "get better" in the next 18-24 months or so at the latest.
No negative intent..there's not even a KKD in Brazil so there's no way that both Mexicans AND Brazilians could be buying KKD donuts in both countries..just stating that KKD is touting it's rosy expansion hopes with the assumptions that any and all people of any country they mention are just dying to do whatever it takes to give KKD all of their money to consume as much KKD donuts as possible...KKD donuts are definitely not the cheapest donuts available, and donuts in general are not the cheapest food available by any means...if everyone could afford KKD the way KKD assumes, KKD would almost have a decent future if they could eliminate all competitors and competing products in every country.
Any Mexican or Brazilian will definitely spend their entire paychecks at KKD. They can't go on without their KKD donuts. It is a huge part of their cultures. Any human alive will soon do the same everywhere on Earth...this is not news, KKD is the future of humanity.
No need to write an essay or waste time speculating on "numbers"....KKD sells DONUTS...when a small cap has a pump campaign w/ media, obvious technical pumps, articles and calls to local media and tv stations w/ pumping news stories appealing to emotional speculation, nothing else matters...the KKD pump will continue as long as the pump campaign can afford it..they sell DONUTS...and pumping is far more profitable