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KREM - Krispy Kreme DoughnutsWeek Ended: 1/27/01
Price 66.00 P/E Ratio 72 52 Week High 108.50
Last Week - 2.31 Earnings Date NA 52 Week Low 29.00
Picked At 67.31 Date Picked 1/25/01 Sector Services
Current 66.00 Open 67.50 Change -1 5/16
Low 65.56 High 67.50 Volume 63,400

Company Description

Krispy Kreme is a branded specialty retailer of premium quality doughnuts which are made throughout the day.As of 10/29/00, there are 164 Krispy Kreme stores operating nationwide. For the 39 weeks ended 10/29/00, revenues rose 36% to $218.9M. Net income totalled $10.5M, up from $4.8M. Revenues benefitted from increased comparable store sales and new franchise stores. Earnings reflect the implementation of a new route management system.

Play Description

January 25, 2001

Krispy Kreme is a producer and retailer of over 20 varieties of premium quality doughnuts. The stock went public last April at $21 and on November 2nd, KREM traded to an all-time high of $108.50, representing a 417% gain in less than six months. However, the stock was hit with insider selling as restricted stock came off of the IPO lock-up. Shares of KREM fell to a relative low of $60.13 on December 20th. More recently, the stock has been building a base in the $62-$67 range and on Wednesday, it broke through $67. We believe that KREM could continue to move higher as we approach the earnings report on March 8th before the bell. We are also looking for a split announcement with the earnings report or out of their next BoD meeting. The company already has enough shares with 13 million issued and 100 million authorized. Going forward, support is the January 22nd intra-day high of $66.67 with additional support at $64, Wednesday’s intra-day low. Resistance is the January 12th intra-day high of $69.69 and then the January 10th intra-day high of $73. Traders may consider entry points on a bounce off of $66.67 or a move above $69.69 on volume greater than 100,000 shares. We plan to use stops at $62 to limit potential losses.

Picked on January 25th @ $67.31
Change since picked +0.00
Stop Loss @ $62.00



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