Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
In a new report, Longbow Research analyst Alton Stump explained why he believes now is a great time to buy shares of Krispy Kreme.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Stump shared his belief that the company has the potential for major national expansion in coming years.
Laying The Groundwork
Krispy Kreme management has been slow to push store builds over the past couple of years, but Stump believes that there is good reason for the slow pace of expansion.
“Management needed to install upgraded technology especially at the store level before ramping up builds,” he explained.
Stump also believes that management is right to take time to perfect its new small-store model before accelerating its store growth beginning in 2016.
Want Private Access to Benzinga Analyst?
Check out the latest strategies our team of experts are using every week so that you can always adapt to the market like the pros!—Get FULL Access to This Week's Webinar Here.
Expansion Potential
Stump believes that Krispy Kreme is unique in the sense that it has national brand recognition with relatively few store locations. In the next 10 years, he believes that Krispy Kreme can expand its number of locations from about 285 to more than 1,500 stores.
EBIT margins at the news stores should also easily exceed the 4.0 percent margins that its stores currently generate.
Finally, with no debt on its balance sheet and strong cash flows, the company is financially well positioned to take on a large-scale expansion initiative.
Outlook
Longbow maintains its Buy rating on Krispy Kreme and its $23 target for the stock.
The firm projects fiscal 2016 EPS of $0.80 and fiscal 2017 EPS of $0.96.
Disclosure: The author holds no position in the stocks mentioned.
Image Credit: Public DomainCrypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.