JBL: Global Gluttony

Krispy Kreme already has a presence overseas and is doing well. In the U.K., Krispy Kreme opened up its first store in Harrods and has now expanded all over London and beyond. Krispy Kreme did what Dunkin' Donuts couldn't do -- convince the British to eat doughnuts.

In Australia, Krispy Kreme started in Sydney and now has plans to open stores across the country. While not as well received as in London due to local chain Donut King's lower prices, Krispy Kreme has great opportunities in the land Down Under.

I cannot recommend buying a stock where you have absolutely no way of practicing standard due diligence. However, once earnings are released, I want you to be in front of the herd. The growth story overseas will most likely not be told with the release. A good management team has an opportunity to learn from past mistakes and not replicate them overseas. Krispy Kreme could be the turnaround play of the year; we could be in the third inning of an incredible story.

While I can't recommend buying Krispy Kreme right now, one stock I do suggest you buy is Valero Energy (VLO Quote).

Refining Opportunity

With lack of refining capacity comes the ability to raise prices. New Valero CEO Bill Klesse said at a recent energy conference in San Antonio that the prospect of a new refinery in the U.S. was zero. Obviously, this gives Valero, which provides the U.S. with 12.8% of its refined crude, a huge advantage.

Klesse said that 2006 would be a record year for profits, just like 2005. I understand that crude inventories are the highest they have been since 1999 due to a warm winter. However, I believe oil will stay high due to geopolitics, and the one part of the oil chain that has no capacity is refineries. Plans by Saudi Arabia to build refining capacity will not affect the market in the short term. Long term, it will provide options, but the expense to ship refined crude from the Persian Gulf to the U.S. will offset any damage additional capacity might levy on Valero.