Trade-Ideas LLC identified

Krispy Kreme Doughnuts

(

KKD

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Krispy Kreme Doughnuts as such a stock due to the following factors:

  • KKD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.1 million.
  • KKD has traded 130,174 shares today.
  • KKD is trading at 2.23 times the normal volume for the stock at this time of day.
  • KKD is trading at a new high 3.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on KKD:

Krispy Kreme Doughnuts, Inc., together with its subsidiaries, operates as a branded retailer and wholesaler of doughnuts, beverages, and treats and packaged sweets. The company operates through four segments: Company Stores, Domestic Franchise, International Franchise, and KK Supply Chain. KKD has a PE ratio of 34. Currently there are 2 analysts that rate Krispy Kreme Doughnuts a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Krispy Kreme Doughnuts has been 497,500 shares per day over the past 30 days. Krispy Kreme Doughnuts has a market cap of $920.9 million and is part of the services sector and leisure industry. The stock has a beta of 1.37 and a short float of 3.5% with 2.26 days to cover. Shares are down 3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Krispy Kreme Doughnuts as a

buy

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • KRISPY KREME DOUGHNUTS INC has improved earnings per share by 30.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, KRISPY KREME DOUGHNUTS INC increased its bottom line by earning $0.49 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus $0.49).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Hotels, Restaurants & Leisure industry average. The net income increased by 26.0% when compared to the same quarter one year prior, rising from $6.55 million to $8.25 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.6%. Since the same quarter one year prior, revenues slightly increased by 4.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • KKD's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, KKD has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $23.53 million or 37.16% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 14.73%.

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