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 22, 2001

Krispy Kreme Doughnuts sold off on Wednesday after the company announced that it had acquired Digital Java, Inc., a small Chicago-based coffee company. Shares of KREM fell to an intra-day low of $70, hitting our stops late in the session. Therefore, we are taking our profits and dropping KREM.

Picked on January 25th @ $67.31
Profit/Loss = +3.69 (+5%) (Stopped Wednesday @ $71.00)
Best Profit = +8.44 (+13%)

February 20, 2001

Doughnut manufacturer and retailer Krispy Kreme Doughnuts traded to an intra-day high of $75.75 early on Tuesday morning. The stock hit resistance and then sold of for the rest of the session. Shares of KREM closed at $72.63 on volume of 213,000 shares. On the positive side, KREM has made three consecutive higher lows and its upward trend has not been violated. We are now just 12 trading days away from the earnings announcement, scheduled for March 8th before the bell, and we are hoping that KREM will able to break through $75.75. Until then, support is Friday’s intra-day low of $72 with stronger support at $71.54, the 5-dma. There is heavy resistance at Tuesday’s intra-day high of $75.75 and then the January 5th intra-day high of $78.13. Traders may consider starting new plays on a bounce off of $72 or a move above $75.75 on volume of at least 100,000 shares by noon. We have moved our stops up to $71.00 to lock in additional profits.

Picked on January 25th @ $67.31
Change since picked +5.32
Stop Loss @ $71.00

February 18, 2001

Krispy Kreme Doughnuts held its ground on Friday despite a generally weak market. On Friday, shares of the doughnut manufacturer and retailer traded to an intra-day low of $72 before bouncing back to close at $73.69 on volume of 347,000 shares. KREM is coming off of a big upside move so it may spend some time consolidating in the $70-$75 range until we get closer to the earnings release, expected on March 8th before the bell. In the meantime, support is Friday’s intra-day low of $72 with additional support at $70.55, the 5-dma. Resistance remains steady at Thursday’s intra-day high of $75.75 and then the January 5th intra-day high of $78.13. The MACD is still gaining strength, as is OBV. Look for a bounce off of $72 or a move above $75.75 on midday volume greater than 100,000 shares before starting new plays. We are leaving our stops at $69.50 to protect gains.

Picked on January 25th @ $67.31
Change since picked +6.38
Stop Loss @ $69.50