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A Tale of Two Companies Rising From Near Ashes

Stocks in this article: DELL KKD

NEW YORK ( TheStreet) -- It's a tale of two companies. Both are off to a blistering start for 2013, both are the subject of takeover talk to one extent or another; both have seen better days, are a shadow of their former selves and are attempting to turn the corner, but will likely never again be what they once were.

Both were considered growth names earlier in their history. I've long been a consumer of both of these company's products. That's where the similarities end. One is a larger, high profile name that has gotten quite a bit of attention from the value investing crowd in the past year or so, as the growth crowd moved on. The other is a small cap, with a well-known brand name, and a checkered past, that has somewhat quietly put itself back into investor's minds.

These are the type of stories that are making 2013 interesting, at least for me; the companies I refer to are Dell (DELL - Get Report)and Krispy Kreme (KKD - Get Report).

Cash-rich Dell, which ended last quarter with $11.3 billion or $6.50 per share in cash, but also $9 billion in debt, is up 26% year to date, and the subject of buyout rumors. The latest story is that Silver Lake Partners is finalizing a bid to take Dell private; a deal that is expected to include Dell founder Michael Dell. While it's unclear what shares might fetch in a deal, just two months ago, Dell was trading near a four-year low, and is up 45% since.

It's been quite a fall from grace for Dell shares though, which were trading in the $17 range just one year ago, in the low $40's in 2005, and low $50's in 2000. Technology changed, competition in the PC space became fierce, and the company suffered the consequences. Longer term shareholders can't be happy with a deal that is anywhere close to the current price ($12.82), but those who swooped in in recent months, have done well...so far.  Chart data by YCharts

Krispy Kreme shares are up 27% year to date, and have nearly doubled since August, as skeptical investors -- that may have been burned by the company's fall from grace in its early days as a publicly traded company -- are showing renewed interest.

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