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 15, 2001

Krispy Kreme Doughnuts, a manufacturer and retailer of quality doughnuts, posted back-to-back gains following the stock split announcement after the bell on Tuesday. KREM’s Board of Directors set a 2:1 split payable on March 19th. On Thursday, the company’s stock traded to an intra-day high of $75.75 before pulling back to a close of $73.81 on volume of 394,000 shares. KREM has broken through major resistance at $70 on heavy volume, so the stock could be ready to move even higher as we move closer to the earnings release on March 8th. Until then, support has moved up to the January 20th intra-day high of $73 with stronger support at the $70 mark. Resistance has moved up to Thursday’s intra-day high of $75.75 and then the January 5th intra-day high of $78.13. Traders may consider entry points on a bounce off of $73 or a move above $75.75 on volume of at least 100,000 shares by noon. We have moved our stops up to $69.50 to lock in profits.

Picked on January 25th @ $67.31
Change since picked +6.50
Stop Loss @ $69.50

February 13, 2001

Doughnut manufacturer Krispy Kreme Doughnuts was having a relatively quiet week, until today when the stock traded to an intra-day high of $68.75 before returning to a close of $67.69. More importantly, the Board of Directors declared a 2-for-1 stock split following its meeting today. The split shares will be distributed on March 19th to shareholders of record at the close of business on March 5th. We expect to see a decent pop from KREM tomorrow as shorts run for cover. From a technical standpoint, support is Tuesday’s intra-day low of $67.56 with additional support at 66.72, the 5-dma. Resistance remains at the February 9th intra-day high of $68.69 and then January 30th intra-day high of $69.50. A move above $70 could send KREM up to $73, the January 10th intra-day high. We are keeping our stops at $62 and we plan to ride this one into the payable date.

Picked on January 25th @ $67.31
Change since picked +0.38
Stop Loss @ $62.00

February 11, 2001

Krispy Kreme Doughnuts was able to break through resistance after spending six sessions in the $64-$67 range. On Friday, shares of the doughnut manufacturer and retailer traded to an intra-day high of $68.69 after Dain Rauscher Wessels reinitiated coverage of the stock with a "strong buy" rating and a $100 price target. KREM ended the session at $67 on heavy volume of 315,000 shares. The residual effects of last week’s follow-on offering have faded and the stock may be ready for an earnings run as we approach Krispy’s earnings release on March 8th before the bell. We are also looking for a split announcement with the earnings report or following the next BoD meeting. Until then, support has moved up to Thursday’s intra-day high of $66.50 with stronger support at Friday’s intra-day low of $64.88. Resistance is now at Friday’s intra-day high of $68.69 and then January 30th intra-day high of $69.50. Traders may consider opening new positions on a bounce off of $66.50 or a move above $68.69 on volume greater than 100,000 shares by noon. Our stops remain steady at $62.

Picked on January 25th @ $67.31
Change since picked –0.31
Stop Loss @ $62.00