I bought this stock at 37 3/4 just because I love the doughnuts. I was never expecting to make this much money on it. I think the reason this stock is so overvalued is because everyone loves their product and they all want to own something they actually like. No one is telling them to buy this because of some analyst's report or something that may make the stock shoot up 10 points. It's like Home Depot. Everyone thought the stores were great and the company was great to work for so the stock just kept going up. It's nice to see that I'm not the only one who believes that a company's stock should be tied to what it sells.
Are you spoofing or are you really as stupid as you sound? KREM is like Home Depot? Tell me when Home Depot had a P/E in the hundreds? Most of the Home Depot-like gold mines prospered from two very important financial effects-growth of EPS and expansion of P/E multiple. It is no surprise to most people (except idiots like yourself) that 75% of the gains in the last few years in companies like Cisco with sky-high P/E's have come from expansion in the multiple people are willing to pay for those earnings.
The problem for KREM holders is how can the multiple expand from here? Even if the company does double in size in five years as management projects, that means even at the current price the company will have a P/E of 50. Is Starbucks P/E 50? No. Does any restaurant company have a P/E of 50? No. Is waiting five years to get your money back (just maybe, if you can find someone to pay 50 times earnings)a smart idea? No. You compare yourself to a modern-day Peter Lynch because you like the donuts and see lines around the block, but Peter Lynch would laugh at you for buying something this bloated.
So no analysts are telling people to buy at this level? Gee, think that tells you something? Of course not, you love the donuts. Eat up, you better get some satisfaction out of this before you pay the price of stupidity.
Buying companies/products you believe in is a terrific way to invest. To a point. The math behind this issue is nothing short of staggering right now. There is no way for a multiple of 100 to be tied to a normal-growth oriented company like this. Great product. I like them as much as anyone, but I don't use my heart in investments. It can hurt very badly. I actually thought this was high when it broke 40 the other day, and to see it over 60 made me short a stock for the first time.
I wish all well. Just remember, math is very real. Good doughnuts, or no good doughnuts.
Scott Livengood. That's right, the KREM CEO. Gee, I thought I was bad shorting 400 at $42, but this guy sold 3 million shares at $21! That's right, he left $120 million on the table (assuming you could actually find enough stupid people to sell 3,000,000 at $62). Yup, $120 million, or to put it in perspective, FOUR TIMES AS MUCH MONEY AS KRISPY KREME HAS MADE SINCE IT ENTERED EXISTENCE IN 1937! Oh boy, and I thought I was down! Well, the good news is that at current growth rates, it will only take the company about 14 years to make up for that mistake. Way to go Scott, you da man!