The company is pretty highly debt leveraged, so the Book Value is inflated. You have to figure most of the assets (stores) are on leased space, so the "real" property value should be backed out of the Book Value computation. The true book value is probably closer to its IPO price.
I am among those that believe that the current P/E of over 60+ is way too high for this type of business... The current stock valuation cannot be sustained.
My question is, for those on this board that are pretty optimistic about the company, future expansion, future earnings, etc., this company has been in business for over 60 years, right? Why isn't KK everywhere by now? Why should the performance of this company be much better now? Sure, they got a cash infusion from the IPO, but is this the catalyst for grow that can justify a P/E > 60?
It takes a lot of energy, time and great execution to grow a company so that it's everywhere. KREM exec's realized this several years ago and have been building the infrastructure necessary to deal with growth. Instead of looking at the past, I'd look towards the future when krispy krem will be everywhere.
in America over the years comes from spirit of capitalism. This was and is (except for the Beatrice years) a family owned company. Role play for a second, your a father, you own a doughnut shop in the south in the 1930's, people, "American's" like your product. Why not build a second store? a third, a fourth. Your kids take over, grow, change, grow. A little at a time. This is the story of a family owned company, then more families owned it, a founder and followers who make their own mix, packaged and shipped it, make their own equipment and lease it, developed which may be some of the first franchise relationships.
The Smithsonian Institute adopted Krispy Kreme as a cultrual Icon. Call and ask them why they did. In America you can dream and do whatever you want. This group has.
I can not speak to p/e. Value is what the next guy or gal will pay. Buy it or Don't . This country has a way of creating almost mythical characters. Before Microsoft, the Beatles and WW2 there was Krispy Kreme. Pay the price your willing to.
Do you really wonder why they are not "everywhere". It's expensive. Try to to buy land in a major city and deal with all the regs. Obviously there was no desire or wherewithall to be everywhere and maintain product integrity. I think the question is: can we sustain a reasonable growth now and maintain the myth?. The key is
devotion to the worker and to create a magic moment for the next customer, get a mix plant near the west coast get into Mexico and Never let up, Go KREM