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.

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

February 8, 2001

Doughnut retailer Krispy Kreme Doughnuts is locked in a tight trading range along with the rest of the market. On Thursday, shares of KREM hit an intra-day high of $66.50 early in the day. However, the stock reversed directions as the day wore on. KREM closed on its intra-day low of $64.94 on volume of 121,000 shares. Hopefully, the stock will break out as we move closer to the earnings release, scheduled for March 8th before the bell. We are also looking for a split announcement with the earnings report or following the next BoD meeting. In the meantime, KREM has support at the January 24th intra-day low of $64 with additional support at the January 18th intra-day low of $62.50. Resistance is the 20-dma at $65.78 and then Wednesday’s intra-day high of $66.88. Look for a bounce off of $64 or a move above $65.78 on midday volume of at least 100,000 shares before starting new plays. We are keeping our stops at $62 as downside protection.

Picked on January 25th @ $67.31
Change since picked –2.36
Stop Loss @ $62.00

February 6, 2001

Krispy Kreme Doughnuts has been basing in the $64-68 range over the past five sessions. On Tuesday, shares of the doughnut retailer and manufacturer traded to an intra-day high of $66.50 before pulling back to a close of $66 on volume of 136,000 shares. KREM continues to feel the effects of last week’s follow-on offering, and it may be stuck in a trading range as the new shares enter the market. We are looking for a split announcement with the earnings report on March 8th before the bell, or out of its next BoD meeting. Until then, KREM has support at Tuesday’s intra-day low of $64.88 with stronger support at the January 24th intra-day low of $64. Resistance has come in at the 20-dma, currently at $66.89, and then $68.25, the January 31st intra-day high. A bounce off of $64 or a move above $66.50 on midday volume greater than 100,000 shares may be possible entry points. We are leaving our stops at $62 to limit potential losses.

Picked on January 25th @ $67.31
Change since picked –1.31
Stop Loss @ $62.00

February 4, 2001

Quality doughnut manufacturer, Krispy Kreme Doughnuts, continues to build a base in the $62-$68 range after its 2.3 million share follow-on offering. On Friday, shares of KREM traded to an intra-day high of $66.50 before pulling back to a close of $$65.13 on volume of 151,000 shares. The stock is holding up relatively well considering that the follow-on offering is 15 times the average daily volume. Hopefully, the stock will be able to move higher after it works off the excess float and we get closer to the earnings release, expected on March 8th before the bell. We are hoping for a split announcement with the earnings report or out of their next BoD meeting. The company has enough shares with 13 million shares issued and 100 million shares authorized. For now, KREM has support at the January 24th intra-day low of $64 with stronger support at the $62.50 the January 18th intra-day low. Resistance remains steady at the 20-dma, currently at $67.58, and then $69.50, Tuesday’s intra-day high. Consider starting new plays on a bounce off of $64 or a move above $67.58 on volume of at least 100,000 shares by midday. We are keeping our stops at $62.

Picked on January 25th @ $67.31
Change since picked –2.19
Stop Loss @ $62.00