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Krispy Kreme Doughnuts, Inc. Message Board

  • mr_tops_and_bottoms mr_tops_and_bottoms May 26, 2004 4:32 PM Flag

    Keep barking Short Dogs;

    we stood still today as far as Gann Points goes. That is good for the Longs; no wasted movement. We've still got 11+ Gann Points to climb to the next top. All your crying, ranting, and not too convincing lies are going to change the direction of this stock price, UP.

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    • Everyone read this!!!!!

      Are the Bears Smart With Their Dough? Or Are They Just Nuts?

      The Wall Street Journal
      "Krispy Kreme Franchise Buybacks May Spur New Concerns"
      Published: 5/25/2004

      Brief Summary: "Since going public in 2000, Krispy Kreme Doughnuts Inc. has faced questions about its accounting transparency and potential for conflicts of interest in investments that its executives made in its franchises. Investors bought the sugar-fueled stock anyway. But two recent deals in which Krispy Kreme bought back franchisees could spark new concerns." This article casts Krispy Kreme Doughnuts (KDD) in a skeptical light as it explores questions raised by the firm's accounting practices. The issues revolve around potential "aggressive bookkeeping to boost its earnings when it acquired its Michigan franchise last year" and "about how Krispy Kreme treated store-closing costs."

      Contrarian Takeaway: This article presents us with an interesting opportunity to revisit some basic tenants of contrarian analysis. Quite simply, contrarians look for the opinion to diverge from price action. In other words, we view skepticism on strong stocks as a bullish sign while optimism on weak stocks is a warning sign that further declines may be in the offing. In the case of KKD, skepticism is abundant. Short interest stands at nearly 30 percent of the stock's float. At KKD's average daily volume, it would take seven days for the short sellers to exit their positions. By either measure, this is considered a "healthy" amount of short interest and would be an encouraging sign on a strong stock. Options traders share the bearish disposition, as put options outnumber those of call options. This too would be a bullish hint on an uptrending stock. Finally, a look at Zacks shows that just two of the six analysts rank KKD with a "buy" rating. So it appears that skepticism is present on many fronts. However, as we mentioned above, we would need to see the price action diverge from the sentiment. That means signs of strength from the shares are needed, and the recent price action has been anything but strong. In many instances, it is said that sentiment buy signals are "early." Therefore, it would be prudent to watch the shares and wait to see if strength develops before buying. Strong price action may mean the concerns expressed are overblown. However, if the price action does not improve, it would be a sign that these concerns may indeed have some teeth.

    • We may be 11+ Gann points from your target, but we are also just 65 cents from the 3-year low.

      By the way, just curious, what would make you think that you were wrong and the Gann magic won't work this time? How low does KKD have to sink?

      • 1 Reply to delaurenthis
      • If I'm expecting an explosive upward move and it's actually going down; it will become evident fairly quickly. A chart can hit the highs and lows in the predicted time spots and form a very different looking chart. That's why it is not visible to the untrained eye that there is a pattern to the whole picture. Otherwise, anyone could see it, predict it and make money on it. That would destroy the markets.

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