Is Domino’s Pizza a Buy?

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What Happened to the Domino’s Pizza Share Price?

Shares in Domino’s Pizza Enterprises [ASX: DMP] rose over 20% today. It’s now trading under $33.

Why Did This Happen to Domino’s Pizza Shares?

DMP reported that it’s half year Net Profit after Tax is up 44.2% on the same period last year. Its next dividend to be paid will also rise 39% on the prior comparative period.

Is Domino’s a Buy?

It’s possible the stock will keep rising, but in general you don’t want to buy the stock once the positive earnings announcement is out. The expression ‘if it’s in the news, it’s in the price’ tells you why.
Domino’s stock has been rising strong for some time indicating the market expected good news. I would expect the price to pull back or at least trade around this price, at least in the short term.

Callum Newman
Editor, The Daily Reckoning

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Callum Newman

Callum Newman

Callum Newman is the editor of The Daily Reckoning and Associate Editor of Cycles, Trends and Forecasts. He also hosts The Daily Reckoning Podcast. Originally graduating with a degree in Communications, Callum decided financial markets were far more fascinating than anything Marshall McLuhan (the ‘medium is the message’) ever came up with. Today Callum spends his day reading and researching why currencies, commodities and stocks move like they do. So far he’s discovered it’s often in a way you least expect. To have Callum’s thoughts and insights on the current state of the currency, commodities and stock markets delivered straight to your inbox, take out a free subscription to The Daily Reckoning here.

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1 Comment on "Is Domino’s Pizza a Buy?"

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1 year 8 months ago

stock is trading on a hefty 50 p/e multiple.
what is the long term sustainability of earnings, when sales, and profits being boosted by low price $4.95 pizzas but franchisees who sell these 4.95 pizzas are struggling and not making any profit.

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