You seem like a smart guy. Tell me whats not to like about -KKD-. I have been long for a few years, and now it starts to come to life. is now a good time to add or take profits?. Valuation is good. Its a small cap so its probably flying under the radar. What can you tell me?
I've read your post about bad news for tire makers. I just want to give you a heads up on this one. The NAT contract expires in july 2013. That can be a game changer , GOOD or BAD. All bets are off , when it comes to the fundamentals in july 2013.I expect some major news coming out then. The last few contracts have seen major changes with this company, and I expect that to continue I don't know if it will be positive or negative but, expect some big change.................................. BTW.........what do you expect MR. MARKET to do from here. I think we will push higher for awhile, maybe 1500-1550 on the S-P 500. Then , sometime net year see a correction. What do you expect?
Thanks, I plan to be out of GT/CTB by end of year.(Got back in when CTB went below 19:)
"I think we will push higher for awhile, maybe 1500-1550 on the S-P 500. Then , sometime net year see a correction. What do you expect?"
2012 the same as you. 2013 - don't know until we get there, but there is ALWAYS a correction - it is just the magnitude that is in question. Caveat on 2012: fiscal cliff resolved or kicked down the road, Europe stays on same path, China does not crash. I think those three work out. Overall earnings will not be as bad as everyone says - so that is a positive. Election will not derail market - it however may effect magnitude of up move, and different stocks/sectors will play out differently with each candidate.
QE3 will have its effect - there will be a lag 1 month to three months or so - but it will do its job on the margins of economy. But as Bernake said, it is not a cure-all - just all they can do from their position.
All in all I am 97.5% invested and will raise cash slowly into the end of the year. Right now - just letting 'em run :)
OK, today was more buying on good volume. Have no idea if shorts or longs, but it closed over 7.64. So whatever you did, if you put in a top keep it in the same place. If it closes over 7.75, you can raise your stop a .09.
Shows what I know, but I still believe this thing is gong to run out of steam.
So what to do? You have had two day volume that has been enough to get rid of most of the short sellers. There may be third day, but it does not look like it. There was heavy selling in the last few minutes before the close on Friday. Most stocks that take off from the 9 and 20 day M.A. eventually comeback to retest (even AAPL)- the question is when? I would expect that most of the committed shorts would come back in to re-short believing that India will not work out, but again when?
Why do I think this? Daily RSI is 78% (70 is usually a good place to sell, but not on a breakout), and other technical indicators say overbought. If you look at a three minute chart of Friday, KKD tried twice to break 7.64 and failed, and the second time triggered the volume sell-off. It may try again and if it breaks 7.64 and closes over that you can start raising your stops.
1) Sell enough shares to cover your cost basis (two years ago would make it in the $3-$5 range), and let it ride with "house money".
2) Sell some or not, I would set a tight stop underneath the price action. Suggestions: 7.25 as 7.30 is solid hourly support on the charts. OR 7.13 as 7.18 is 50% level of the hourly igniting bar on Thursday (9-10 am). If the move is to be sustained, KKD bulls will not let the stock go below 7.18. I set them a nickel below in case of a fake out, you can set it lower of course.
If stock breaks 7.13 it is going back to high to mid-6's. If you really believe in the company wait for it to consolidate and slowly start buying shares as it consolidates and moves up, consolidates and moves up....
Myself: I would sell two thirds, and set the 7.13 stop as I am 75% confident that the move will not hold up in the near term, and probably move on, but keep it on radar.
Aww,Joann. I thought you did not like me. Funny story, I remember when KKD opened up a franchise(s) in NYC (1987?). The guys on the trading desk went nuts over those donuts. Kind of like the drunk college kids that would stand in line at the KKD store after bars closed to get hot donuts. Never really got it, but it was always funny.
Hard to believe but there are people who think this will go to $9/share. They are doing share buybacks and have a decent to good balance sheet.
What's not to like? Missed on revenues, gross and operating margins were solidly up, but net margin was way down. 2014 EPS of .35 is only .03 over 2011 results. CEO commented that they were in a tough competitive business. There is absolutely zero to negative premium in the ITM opions going out. The P/E multiple even on a forward basis is hard for me to justify.
The catalyst for the move seems to be the share buyback, earnings beat, but mostly the move into India. On the combined news it looked like there was a classic short squeeze. This may be a case of selling the news:
"Krispy Kreme Doughnuts Inc plans to open its first Indian store this year, but the maker of the Original Glazed will find it is not alone in its bid to cash in on the $13 billion Western fast food market in Asia's third-largest economy.
Krispy Kreme's rival Dunkin' Donuts has already opened its first outlet in India, one of many Western food chains which sees the higher-spending urban Indian as a way to offset slowing sales in mature markets. Joining them are Mad Over Donuts and Donut Baker, local outfits that have set up shop in big cities such as Mumbai, New Delhi and Bangalore."
From same article the VP of Int'l marketings comment was probably the most revealing: "I think we will have to wait and see," Rogers said of India. "I can't say we're going to be aggressive or not."
Whether it is good stock fundamentally or not, this is really a technical decision. For two exmaples of stocks (commodity and news) that broke out check charts of JVA and LGF. There are several ways to play it depending on your conviction in the stock. [See follow-up post]
Thanks for your input mitch. I don't dislike you. You and me have opposite investment strategies, thats all. I am more conservative and take a LONGER VIEW on my investments than you do. I was in Winston - Salem a few weeks ago and stopped into the KKD store (corp. home). It made me check up on my KKD stock. I was suprised to see the low PE and solid financials. I have been watching this one on and off since the IPO. It was a media favorite for a few years after the IPO and then dropped from about 40.00 to 6.00 dollars per share. I bought some then and it has been dead money until recently. This is one that I can see going to 30.00 in the next 3-5 years. it doesn't matter what happens with the short term technicals. I always buy a company stock with the idea it is for at least 10 years. You seem to be more of a trader than me. That's OK as long as that makes you happy. As for me and KKD, I'm holding and we will see what happens in 5-10 years........................................... P.S..........IMO..........KKD is the PREMIUM BRAND! and thats where I like to be........................ thanks