Sell
Despite the better than expected profit and the 18% share price increase, I reccomend for investors to sell their stock in KKD. Might as well take the awesome 18% price jump and sell.
Reason's I think this is not a good company to invest in:
- Revenue has decreased every year. How is a company that sells doghnuts supposed to grow if it can't increase revenue?
- Profit margins are small. the profit margin is 1.37%. If the economy takes another turn, KKD is going to be very squeezed to make a profit.
- It is already selling for over 5X book value. I'm not quite sure what KKD has done to warrant such a high market price.
- Most importantly, there are better companies to invest in like my previous recs on my Motley Fool CAPS blog including VPRT, PNRA, and GS
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