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Domino's Delivers a Profitable Pizza
04/12/2016 8:00 am EST
Our latest recommendation,a leading pizza delivery operation, has been on a roll, asserts Nicholas Vardy, editor of Bull Market Alert.
Domino's Pizza (DPZ) is up 19.97% year to date versus the broader S&P 500's gain of only 1.5%.
The reason? Fourth-quarter earnings in late February blew away expectations.
Specifically, Domino’s reported a fourth-quarter 10.7% domestic same-store-sales growth figure and earnings per share growth of a whopping 26.4%.
Analysts promptly increased their consensus EPS expectations for the first quarter and a big short squeeze in the stock no doubt helped as well.
Domino’s is certainly in expansion mode both in the US and abroad. Last year, the company added 133 domestic stores, the highest number it has opened in 15 years.
Tellingly, 88 of those stores were opened in the fourth quarter, reflecting strong growth in the United States.
Still, most of Domino’s growth is coming from overseas, with international store count figures growing by 323 in the fourth quarter and 768 in the full year. Overall, the company grew its store count nearly 8% last year to 12,530 total restaurants.
As a growth stock, Domino's is firing on all cylinders, even though the stock has done little in the past month. And therein lies the opportunity.
While most of the market is overbought, this stock offers the chance to get in at technically oversold levels.
With the company announcing earnings on April 28th, I think it’s a good bet that the company will report another blowout quarter leading to yet another big pop in the price.
By Nicholas Vardy, editor of Bull Market Alert
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