No. of Recommendations: 3
I was crafting a response to the original post yesterday morning, describing how I had opened up a small starter position in mid June at around $300/sh.
The risk reward at that level seemed pretty compelling to me.
Mainly because the pizza business seems pretty unkillable (at least looking around New England, where Im based) and because DPZ has been trading at reasonable valuations and quite cheap compared to its 5 year averages on a P/E, P/S, EV/S basis. This is for a business with 45% ROE. Revenue growth has been slow lately, but hey, maybe a new partnership with Uber can help. International growth seems like it has a long runway ahead of it.
It had been on my watch list for a while. DPZ also showed up on two MS best buys lists - one for companies with high operational efficiency, the other for defensible with stable earnings.
Now that its run from 300->400 Im kicking myself for not adding more quickly. Figured I'd have plenty of time as the downtrend has been going on for a while. The risk reward here is not as attractive, but suspect we get some closing of this huge recent gap.
-river valley
PS - I confess that I havent eaten a dominoes pizza since college in the 1980s :)
