Is Krispy Kreme Doughnuts (KKD) Destined for Greatness?

Krispy Kreme Doughnuts (NYSE:KKD) is continuing its international expansion as well, and it will establish a presence in Taiwan in the near future. This seems like a great start to enlarge Krispy Kreme’s beachhead on the Chinese mainland. On the other hand, Krispy Kreme’s expansion plans are a drop in the bucket compared to rival Dunkin Brands Group Inc (NASDAQ:DNKN) , which is planning to add more than 300 new locations in the United States alone this year. That’s nearly half the number of Krispy Kreme Doughnuts (NYSE:KKD)’s total domestic locations! If Krispy Kreme doesn’t have a strategy to maintain its brand cachet against the rapid expansion of its chief rival, it could fall behind as consumers gravitate toward a more convenient Dunkin Brands Group Inc (NASDAQ:DNKN). It also doesn’t help Krispy Kreme that Dunkin Brands Group Inc (NASDAQ:DNKN) has been diversifying away from a donut-heavy menu to attract consumers who might otherwise avoid the temptation of a doughnut.

Longtime Fool contributor Rick Munarriz thinks that Krispy Kreme Doughnuts (NYSE:KKD) is part of the leading edge of junk food franchises that Americans have gravitated toward, in spite of health warnings and the persistent sirens of an obesity crisis. The Cheesecake Factory Incorporated (NASDAQ:CAKE) , another franchise known for its unhealthy baked goods, is also growing quickly. It hasn’t gained as much as Krispy Kreme, but it hasn’t had to start from such a low point, either. There remains a certain prestige in being “the treat franchise,” and Krispy Kreme embodies this better than Dunkin Brands Group Inc (NASDAQ:DNKN) — at least from this writer’s humble perspective.

Putting the pieces together
Today, Krispy Kreme Doughnuts (NYSE:KKD) has many of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is Krispy Kreme Destined for Greatness? originally appeared on Fool.com.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool has no position in any of the stocks mentioned.

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