Krispy Kreme Doughnuts ( KKD) Company Profile: Krispy Kreme Doughnuts, as the name implies, sells doughnuts and related items through company-owned stores. Current Share Price: $7.04 (Jan. 6) 2010 Share Price Gain: 134% Comeback Story: In April 2000, Krispy Kreme went public, touting increased profits due to the popularity of its glazed doughnuts with consumers. The rapid expansion carried the company for a few years until the stock collapsed in 2004, falling from $40 to $12. In 2005, CEO Scott Livengood was removed from the job after the Securities and Exchange Commission probed Krispy Kreme for alleged improper accounting. Livengood denied these claims, instead attributing the company's decline in profits to another fad: the low-carb craze. However, Livengood was slapped with shareholder lawsuits following accusations that he and the company were involved in self-dealing. Shareholders alleged that Krispy Kreme paid a premium to acquire a franchise that Livengood's ex-wife partially owned. "There was a real faddish time with Krispy Kreme, and the company had to restructure to pay off lawsuits," says Hodges. whose Hodges Small Cap Fund holds a position in Krispy Kreme as of Sept. 30. "But they had a turnaround expert come in and re-establish the business. They closed unprofitable stores and returned to a more realistic base of what the doughnut business can make." "It's not hugely profitable, but now they're making money," Hodges adds. "Those doughnuts will never be the craze it was, but people are going to continue to eat doughnuts."