Krispy Kreme

Green Mountain Coffee Roasters Inc. founder and Chairman Robert Stiller likes doughnuts with his coffee.

Stiller recently more than doubled his stake in Krispy Kreme Doughnuts Inc., from 3.46 million shares to 7.31 million shares, according to a filing Krispy Kreme made Aug. 2 with the U.S. Securities and Exchange Commission. That makes Stiller the company's largest shareholder, with nearly 11 percent of the outstanding shares, worth $57.7 million at Friday's close of $7.90 per share.

Neither Stiller nor Krispy Kreme returned calls Friday for comment about Stiller's action. Suzanne DuLong, spokeswoman for Green Mountain Coffee Roasters, also declined to comment, saying Stiller's private investment had no connection to Green Mountain.

Anton Brenner, an analyst with Roth Capital Partners in Newport Beach, Calif., said Friday that Krispy Kreme is "turning itself around" after tumbling into an abyss that saw the company's share price plummet from $47 or $48 per share in 2005 to $2 or $3 per share in 2008.

"They blundered badly and were floundering for several years from 2005 to 2010," Brenner said. "They expanded too quickly, built stores that were far too large, tried to service markets they probably shouldn't have tried to service in off-premise locations."

Krispy Kreme also got into hot water with the SEC, which found that the company was manipulating certain numbers on its balance sheet. Brenner said the company began turning things around in 2009 after settling with the SEC.

The settlement required three former top executives of the company, without admitting wrongdoing, to pay a reported $780,000 in fines and return allegedly ill-gotten gains for inflating corporate earnings in 2003 and 2004 and then selling stock, according to a 2009 story in Nation's Restaurant News. The company was not fined.

Brenner said Krispy Kreme's management team was replaced between 2005 and 2008, and a number of stores across the country were closed. The chain decreased from 440 stores to 420 in 2005. Today it has 646 stores in 21 countries.

"Their sales have strengthened; margins are improving; they're growing again," Brenner said. "We have a 'buy' recommendation."