What Happened to the Domino’s Share Price?
Domino’s Pizza Enterprises [ASX:DMP] operates retail food outlets and a franchise service. DMP holds the master franchise rights for the Domino’s brand in Australia, New Zealand, France, Belgium and the Netherlands. In 2013, they acquired a 75% stake in the Japanese Domino’s franchise.
The company has 970 stores across five countries
The share price closed 3.57% higher on Wednesday.
Why Did This Happen to DMP Shares?
It’s a solid company. Revenues for 2014 nearly doubled and DMP paid a 36.7 cent dividend.
In a short five years, the stock price has climbed a massive 548%.
There have been two distinct rallies this year. Each one has seen the share price gain more than 20% in 30 days.
In February, after the first half financial year results came out, the stock gained 25.97% before flattening out. This happened again in August. Upon the full year numbers, the share price gained another 24.88% in less than four weeks.
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Since 10 October, the share price has gained another 13.75%. The stock currently trades around $29.
What Now for Domino’s Pizza Enterprises
Could Domino’s be in the middle of another 25% increase? The market seems to be pushing DMP higher. Year to date, the stock is up 80%. Each rally sees the company sell a few dollars, plateau and then trade higher again.
Domino’s is proving to be a stand out performer for 2014. Already it’s up a massive 80% so far this year. However, it’s currently trading at 44 times earnings, which means the market is expecting earnings growth to continue to increase.
Long term, there is still room for growth as they expand the Domino’s franchise in Japan to over 500 stores. They currently have about 320.
The share price doesn’t look like it’s slowing down yet.
And if it does repeat the rallies of this year, a 25% increase from the October low will see Domino’s reach $31 per share.
Domino’s appears to be a solid company with good growth potential, but it’s still very expensive to buy at its current price point. Let the rally finish, and try to take advantage of any sell-offs that occur.
Shae Smith+
Editor, Money Weekend
The post Why The Domino’s Share Price Rose Further Today appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
