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Author: wax Big red star, 1000 posts Feste Award Nominee! Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 766  
Subject: Re: Krispy Kreme: Buy, Sell, or Hold? Date: 8/5/2004 6:18 AM
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Hi Rick;

You caught me venting again. But you did make me laugh!

See, we both agree that we should sell Stock Advisor! Ahhh, a marketing joke. Just teasing of course.

As to the arrival of a fair value, I just went through the company's latest annual financials, determined a few metrics, and then ran a discounted cash flow calculation, which I hate to do stand alone, but in a pinch, it will get me in the ballpark.

If I had more time, and some interest in KKD, I would spend the time trying to figure out what the company would be worth from a leveraged buyout standpoint as well as what the company was worth when compared to other companies of similar size in the same industry.

The other thing that I would do would be to go back through the company's annual financials, going back as far as I could. Since the company has been around since 1939, there should be plenty of that information. With that information, I could then determine the probability of the company meeting my valuation expectations.

Lastly, I would spend the time needed to go through the company's franchise agreements as they relate to real-estate holdings. As you know, sometime folks don't think things through when they buy a franchise, especially if the company they are buying from is will to take back some of the paper.

Any way...thanx for the smile.

Wax
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