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Avoid This Hot Stock

http://www.fool.com/investing/general/2011/08/03/avoid-this-hot-stock.aspx

CAPS' Weekly Top Stock Idea
August 3, 2011

Each week, Motley Fool editors cull a top stock idea from the pitches made on CAPS, the Motley Fool's 180,000-member free investing community. Want your idea considered for this series? Make a compelling pitch on CAPS with a minimum length of 400 words. Want to follow our weekly picks? Subscribe to our RSS feed or follow us on Twitter.
Company Dunkin Brands (Nasdaq: DNKN  )
Submitted By: TSIF
Member Rating: 99.94
Submitted On: 7/27/2011
Stock Price At Underperform Recommendation: $28.88

Targacept profile
Star Rating *
Headquarters Canton, Massachusetts
Industry Restaurants
Market Cap $3.34 billion
Industry Peers Green Mountain Coffee Roasters (Nasdaq: GMCR  )
Teavana (NYSE: TEA  )
Coffee Holdings (NYSE: JVA  )

Sources: Capital IQ (a division of Standard & Poor's), Yahoo! Finance, and Motley Fool CAPS.

This Week's Pitch:
I really like Dunkin' Brands over some of the other brands. I really have trouble trying to figure out the menu in Starbucks [ (Nasdaq: SBUX  ) ]. I know a lot of our passion for coffee came from Italy, but latte, vende, grande, etc. are just a little too much for this simple country boy. Krispy Kreme Doughnuts [ (NYSE: KKD  ) ] is fairly popular where I'm from. I really thought they were in trouble [when] the diet fads started circulating. In small towns, however, the regulars, especially government workers seem to have kept business going. Overall, though, they don't seem to innovate, and I don't see much growth. So now being a New Englander by adoption (whether they want me or not), I've come to like Dunkin' Brands the best.

Their menu is easy to understand. They try to innovate. They change up their menu and now offer K-Cups. Overall though, they are saturating this market. I won't be surprised someday if I see a Dunkin Doughnuts inside of a Dunkin Doughnuts! I'm not sure what a few franchise owners were thinking. One of the early Dunkin Doughnuts in my area closed recently. They didn't have a drive thru and were on a tough corner to get in and out of.

I thought all the coffee shops were in trouble w