- In spite of a high P/E multiple, KKD's stock price is justified.
- Over the past decade, KKD has transformed from a dysfunctional company with insolvency risks into a cash flow machine.
- Strong management, attractive business model, great cash flow growth, and a reasonable valuation make KKD an OK buy.
- KKD has some upside potential due to deleveraging, which could make an LBO offer attractive to a private equity firm.
- High growth expectations embedded in the stock price provide KKD with less "margin of safety" than might be desirable for many value investors.