Krispy Kreme Doughnuts (KKD) Is Strong On High Volume Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

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 $13.0 million.
  • KKD has traded 787,947 shares today.
  • KKD is trading at 41.97 times the normal volume for the stock at this time of day.
  • KKD is trading at a new high 11.03% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in KKD with the Ticky from Trade-Ideas. See the FREE profile for KKD NOW at Trade-Ideas

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 39. Currently there are 3 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 542,300 shares per day over the past 30 days. Krispy Kreme Doughnuts has a market cap of $1.1 billion and is part of the services sector and leisure industry. The stock has a beta of 2.86 and a short float of 7.4% with 5.93 days to cover. Shares are down 11.8% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

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 revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • KKD's debt-to-equity ratio is very low at 0.04 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 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has slightly increased to $17.16 million or 7.89% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.64%.
  • KRISPY KREME DOUGHNUTS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, KRISPY KREME DOUGHNUTS INC reported lower earnings of $0.44 versus $0.48 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.44).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

If you liked this article you might like

Whole Foods Data Breach, IKEA Buys TaskRabbit, and More: Friday's Top Stories

Whole Foods Data Breach, IKEA Buys TaskRabbit, and More: Friday's Top Stories

5 Brands Cashing In on the Solar Eclipse

5 Brands Cashing In on the Solar Eclipse

Krispy Kreme, Hershey's Collaborating to Satisfy a Craving You 'Never Knew You Had'

Krispy Kreme, Hershey's Collaborating to Satisfy a Craving You 'Never Knew You Had'

Shaquille O'Neal Joins the Krispy Kreme Team

Shaquille O'Neal Joins the Krispy Kreme Team

Shake Shack Shares Too Pricey to Bite Into

Shake Shack Shares Too Pricey to Bite Into