TSC Ratings' Updates: Krispy Kreme

Shares have tumbled 53% over the past year, underperforming the S&P 500. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

We've upgraded West Pharmaceutical(WST) from hold to buy, driven by its reasonable valuation levels, good cash flow from operations, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Net operating cash flow increased to -$3.3 million, and ROE improved slightly compared with the year-ago quarter, which can be construed as a modest strength in the organization. Revenue fell by 10.4%, and EPS decreased. West's 0.8 debt-to-equity ratio is somewhat low overall but is above the industry average. The 1.5 quick ratio is sturdy.

All ratings changes for June 16 are listed below.

Ticker Company Current Change Previous AMAC American Medical Alert BUY Upgrade HOLD AVP Avon BUY Upgrade HOLD BBOX Black Box BUY Upgrade HOLD BRN Barnwell Industries SELL Downgrade HOLD CBD Companhia Brasileira de Distribuicao BUY Upgrade HOLD CIWT China Industrial Waste Management HOLD Upgrade SELL COMS 3Com HOLD Upgrade SELL CSWC Capital Southwest SELL Downgrade HOLD CTDH CTD Holdings HOLD Upgrade SELL DHX Dice Holdings HOLD Upgrade SELL EBF Ennis HOLD Upgrade SELL EGHT 8X8 SELL Downgrade HOLD EXC Exelon BUY Upgrade HOLD FRD Friedman Industries BUY Upgrade HOLD HWCC Houston Wire & Cable HOLD Upgrade SELL KKD Krispy Kreme SELL Downgrade HOLD PFOH PERPETUAL FEDERAL SAVINGS BK HOLD Upgrade SELL RAVN Raven Industries BUY Upgrade HOLD SNCR SYNCHRONOSS TECHNOLOGIES HOLD Upgrade SELL SNN Smith & Nephew BUY Upgrade HOLD SVU Supervalu HOLD Upgrade SELL TNK Teekay Tankers SELL Initiated TXIC Tongxin International SELL Initiated TXICU Tongxin International SELL Initiated VIGN Vignette HOLD Upgrade SELL VRS Verso Paper SELL Initiated WPCS WPCS International HOLD Upgrade SELL WST West Pharmaceutical BUY Upgrade HOLD

Note: Our quantitative model makes stock recommendations based on GAAP figures that may differ materially from data as reported by the companies themselves. As a result, rating changes are occasionally driven by so-called nonrecurring items. As always, we urge readers to use TSC Ratings' reports in conjunction with additional information to construct their opinions on the value that should be placed on any given stock.

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