It was a nutty week for doughnuts, macadamia nuts, and toy nuts.
Take the dough out of doughnuts, and you're just nuts
Spelling lessons isn't the only thing that Krispy Kreme (NYSE:KKD) needs these days. The glazed-over doughnut maker continues to struggle with SEC scrutiny and profit shortfalls. The company was barely profitable with flat sales growth in its latest quarter, and the company isn't going public with any kind of guidance as to when it will be able to get back to regain its darling stock ways.
It seems as though it wasn't that long ago that Krispy Kreme's stock was soaring, earning a nod from our Motley Fool Stock Advisor newsletter when its prospects seemed bright. Yet that "Hot Stock Now" neon light has gone out over the past year as iffy franchise transactions, fad diet fallout, and operational missteps have tripped up the company -- and, naturally, the stock. It even prompted our own Bill Mann to wonder whether the stock was actually worthless. Yes, doughnuts are in the shape of zero, but the time is ticking on the company if it wants to make sure that it doesn't share the form of its share price too.
Hershey bags a Hilo hottie
Quicker than you can say "Book 'em, Dano" chocolate giant Hershey (NYSE:HSY) has agreed to buy Hawaii's Mauna Loa in a $130 million transaction. With 40% of the macadamia nut market, Hershey's getting a brand with a lot of nutty potential. Even better, it's getting it at a price that is just a little more than the $80 million in revenues that Mauna Loa produced last year. Hershey, on the other hand, trades at three times last year's revenues.
The deal, which will be accretive to earnings, won't mean too much to Hershey for now. $80 million in a company with $4 billion in sales is a mere drop in the bucket. However, each brand should play well into one another, giving Hershey an opportunity to introduce new high-end snacks while broadening Mauna Loa's distribution.
A whole lot of Google going on
While Google's (NASDAQ:GOOG) stay perched at $200 was short-lived the search specialist is ready to flood the market -- and not in a good way. Along with the end of the lockup period that tied insiders to their shares in this year's popular IPO, insiders are filing to sell, and the growing float may have a calming effect on the stock's volatility now that more shares will be trading hands on a regular basis.
You can't necessarily blame them as there are big gains to be made for those who believed in Google early enough to put their sweat and money into it. A little more stability thanks to the float's new girth may also be a healthy thing.
Toys will be toys
If you ever want to make some easy money, bet someone that they can't name the country's leading toy retailer. More likely than not they will come back with Toys "R" Us (NYSE:TOY). At that point you can do a little dance, rattle off a few "in your face" taunts and fire back the real answer: Wal-Mart (NYSE:WMT). Yes, Wal-Mart lapped that giraffe place a few years ago, and it isn't looking back. Toys "R" Us isn't even giving Sam Walton's discount department store empire much of a chase as it closed out its third quarter with a loss and a showing a 5% slide in same store sales over the first nine months of its fiscal year.
Toys "R" Us has been busy closing its clothing stores and growing its Babies "R" Us chain, but until its namesake chain gets it right it's not going to be a very jolly holiday season for the troubled retailer.
Longtime Fool contributor Rick Munarriz will still spend more time and money at Toys "R" Us than Wal-Mart this holiday season. So at least he's doing his part. Heck, he may even see if he has a spare quarter and ride the mechanical Geoffrey the Giraffe. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
