White Brook Capital Partners, an investment management firm, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. White Brook Capital’s middle capitalization focused fund had a forgettable year in 2024. With the announcement of fourth-quarter earnings and positive 2025 outlook by the fund’s portfolio companies, fortunes have turned around thus far in 2025. The portfolio’s dominant theme is that it owns quality businesses in sectors that for one reason or another are out of favor. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
White Brook Capital Partners highlighted stocks like Krispy Kreme, Inc. (NASDAQ:DNUT) in the fourth quarter 2024 investor letter. Krispy Kreme, Inc. (NASDAQ:DNUT) is a doughnut producing company. The one-month return of Krispy Kreme, Inc. (NASDAQ:DNUT) was -5.54%, and its shares lost 30.62% of their value over the last 52 weeks. On January 27, 2024, Krispy Kreme, Inc. (NASDAQ:DNUT) stock closed at $9.38 per share with a market capitalization of $1.595 billion.
White Brook Capital Partners stated the following regarding Krispy Kreme, Inc. (NASDAQ:DNUT) in its Q4 2024 investor letter:
“Krispy Kreme, Inc. (NASDAQ:DNUT) has languished since our entry in 2024. In the fourth calendar quarter, the Company reported earnings inline with expectations while also doubling their forecast for the number of McDonald’s locations they would be in by the end of the year. Importantly, given the timing of the rollout during the third quarter, they weren’t yet seeing a financial impact of distributing through McDonalds.
Unfortunately, during the fourth quarter, the Company was the victim of a cyber attack that disabled its online ordering capability. While it has been rectified, one of the ways that investors try to determine a company’s financial results before quarter end, is by buying aggregated credit card data from data brokers. With their incremental growth coming from selling in McDonalds and online ordering down for a significant period during the fourth quarter, the credit card data looks bad. We think results will turn out better when they report. Early reviews of the Krispy Kreme McDonalds experience are very good and McDonald’s workers report customer enthusiasm for Krispy Kreme that portends solid results for the partnership. Although many of these locations weren’t launched until late in the fourth quarter, I believe fourth quarter results should largely be glossed over, with a focus on donut velocity at McDonald’s and the positive momentum seen there. Furthermore, by the second quarter, it should be clearer what Krispy Kreme’s post McDonald’s rollout form will look like and the stock should begin to respond.”
An employee of the grocery store happily decorating doughnuts with colorful icing.
Krispy Kreme, Inc. (NASDAQ:DNUT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Krispy Kreme, Inc. (NASDAQ:DNUT) at the end of the third quarter which was 11 in the previous quarter. While we acknowledge the potential of Krispy Kreme, Inc. (NASDAQ:DNUT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Krispy Kreme, Inc. (NASDAQ:DNUT) and shared White Brook Capital Partners’ views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.