Hedge Funds Are Cautious Regarding Krispy Kreme Doughnuts (KKD) as It Misses Estimates

The increase of the aggregate value of hedge funds’ holdings came mainly from the increases registered among the company’s largest shareholders in our database. Among the top seven funds with the largest stakes in Krispy Kreme Doughnuts (NYSE:KKD), five boosted their positions and two funds, Israel Englander’s Millennium Management and Dmitry Balyasny’s Balyasny Asset Management initiated new stakes of 733,400 shares and 458,800 shares respectively. The largest shareholder at the end of June was Amy Minella’s Cardinal Capital, owning 1.03 million shares, followed by Jim Simons’ Renaissance Technologies, which boosted its position by 170% on the quarter to 909,100 shares. In addition,  billionaires  George Soros’ Soros Fund Management and Ken Griffin‘s Citadel Investment Group increased their positions by 28% and 431% to 642,500 shares and 251,600 shares respectively.

Nevertheless, despite the increase of the top shareholders’ “bullishness” that Krispy Kreme Doughnuts (NYSE:KKD) witnessed during the second quarter, these investors allocated tiny portions of their equity portfolios towards the position. Moreover, compared to some of its larger industry peers, Krispy Kreme also ranked much lower. For example, Starbucks Corporation (NASDAQ:SBUX) ranked as the third most popular restaurant stock, being included in the equity portfolios of 46 funds at the end of June. The most popular was McDonald’s Corp. (NYSE:MCD), in which 81 investors disclosed long positions (read the full list of hedge funds’ most popular restaurant stocks).

In this way, despite the increase of Krispy Kreme Doughnuts (NYSE:KKD)’s popularity among hedge funds, a breakdown of their positions shows that they were cautious regarding the company and we think that it is the best scenario to follow right now regarding the company.

Disclosure: none