Domino's Pizza Share Discussion Threads

[indieman] 21/11/2007 08:02

Actually, it has been resistance as well as support over a substantial period (Jan to April this year), so recent action has been the first retest. If you look at the way the price soared after April, you can see the potential concern if the price falls below 195p.

[lob2] 20/11/2007 23:01

Indieman,

I agree with your analysis. I am right (and worried) about instutions picking up large share parcels. On the one hand it is positive that they are willing to support the share price. On the other, the selling needs to stop, as they won't support the share price indefinitely.

I asked the company directly whether there was any particular reason why the share price had dropped over the last few days and was told that nothing has changed since the update at the beginning of November which prompted the buy recommendations. It is a question of market sentiment. People seem to be intent on cashing in regardless of the quality of the company. I am not sure how this can turn around. Would be reassuring to see a bounce tomorrow but I can't see what that catalyst would be.

I guess you are saying that this has been the support level at various points over the last 12 months and it needs to hold?

[indieman] 20/11/2007 22:41

lob,

Should you be right about institutions picking up large share parcels, it's more worrying. It implies that without that support, it would have fallen quite a bit further.

Mind you, 200p involves more than just round number psychology. Check out the chart for the last year for support levels.

[lob2] 20/11/2007 20:07

In fact, I think the conensus prospective p/e for y/e 2007 is now 24.8.
Whether that's still too expensive, I don't know. It does seems reasonable. I know the company regards its valuation in terms of discount to cashflow and on that basis it thinks its shares are good value. However, it's what the market thinks that's going to determine things.

[lob2] 20/11/2007 19:31

Indieman, I hope you are right about the possibility of a pullback. 200p feels like an important psychological support as well as a solid support level in the last year. At the moment, the selling pressure seems relentless. The company purchased another 250,000 shares today at 204 and I believe over 1.5m shares were placed with instutions also at 204. They were gathering up loose stock. Whether that will stem the flow of sales that has been pushing the price lower, time will tell. I think the company believes its shares are undevalued. However, it's the market I'm concerned about.

Dom is now on a prospective p/e for the y/e 31/12/07 of 26 and 22 for next year. Would like to think that this is good value for a growth stock but not if everyone wants to be in cash.

[indieman] 20/11/2007 16:48

200p now gone, although a pullback is possible. Shame it happened when the market recovered a bit.

[clarky5150] 14/11/2007 08:23

Morning all. Been a positive start to November especially as the markets in general have been all over the place.

[mitzis] 02/11/2007 08:21

Telegraph says Buy

[indieman] 01/11/2007 22:36

lob,

The analyst's recommendations appear to pay little attention to the dangers to the UK economy at the moment and its possible effects on discretionary spending.
It also fails to recognise the dangers inherent in holding the shares of a high p/e company at a time when investors are questioning their own risk appetite.

[vassily] 01/11/2007 22:00

And still the price declines.
DOM at 150p would be scrummy.

[lob2] 01/11/2007 16:42

Looks like a pretty solid update from Dominos. Nothing other than market sentiment to explain the decline from 300 pence. Profits to be in line with market expectations notwithstanding a one-off hit due to a rise in costs. Of particular reassurance to long-term holders like me was that they are on track to open another 45 stores this year. There had been some speculation that they were falling behind in this area due to planning difficulties. Today Panmure Gordon, Charles Stanley and altium Capital reiterated their buy reommendations with a target in the 315 to 350 range. Having bounced yet again from the 200 pence level and in the knowlege that the comany is in good shape, I think the potential to the upside is a now a lot greater than the risk to the downside. I suppose the analysts could all be wrong but they do seem to be consistently impressed with this company and its prospects.

[k4] 01/11/2007 10:04

I think lob2's "event" arrived yesterday - the report putting the frighteners on all processed food!

[cambium] 01/11/2007 09:37

14/10 2003 was when I last bought for a three bagger

[cambium] 01/11/2007 09:21

Im out too thanks for the ride guys

[dan10] 01/11/2007 09:12

Looks like a short from here. Good company but p/e high, and economy bearish so sales will prob drop. 150p target?

[techmark] 01/11/2007 08:10

trt,

"I think there is real danger now the price could fall below the £2.00 level and if there isn't a bounce back to £2.00 showing support, then there is a chance the price could go lower still".

I told you that several months ago when the share price was almost 300p. At that point you were ramping the stock and calling for 350p or more.

[lob2] 30/10/2007 13:30

I think it is events that will determine the next move. The analyst presentations are going to take place this Thursday. There may also be a trading update. There needs to be some convincing news and recommendations for the upward momentum to continue. Any disappointment will certainly push the share price down again. However, positive news could lift the share price towards 250 - 260's level. As I mentuioned in an earlier post, I think the directors need to show faith by making purchases of their own. The last director transaction was by the chairman in the sale of 5% of his holding. Whilst, he probably just wanted some cash and had a reason to sell not linked to the company's propsects, I feel it happened at a bad time in terms of sentiment towards the company. Some directors' purchases would help the sentiment significantly in my view. I wonder if they read these posts?

[indieman] 30/10/2007 07:13

DOM seems to be gradually winding up to a move, but the direction is still unclear.

The 50 and 200day EMAs may yet avoid a Dead Cross and, as long as the 200day itself turns up, that would be pretty positive. I have noticed previously that when such an MA cross is in prospect but they either don't cross or only do so modestly, the price can react quite strongly in the opposite of the normal direction. On the other hand, volume on the recent rise is very modest and doesn't suggest great underlying strength of support.

[johnnypardal] 24/10/2007 11:46

It seems to be in an awful hurry for an early start to year-end rally.

[lob2] 23/10/2007 16:58

One doesn't want to tempt fate but dominos could be starting an uptrend at last. Indieman was right in his view that there is good support in the 200 - 210 range. With analyst presentations and a possible positive trading update just 9 days away, I would expect the bias to be on the buying side. A decisive move above 220 would be encouraging. However, what I really want to see is directors dipping into their own pockets with some share purchases after the closed period between now and what I hope will be an announcmeent on or about 1st November. I was always troubled by timing of the company's purhcases of its own shares. Whilst the purchases in themselves showed confidence, the timing of them indicated a desire to prop up an ailing share price. I think it will need some personal investments by directors to show that the people in the know feel that the company is undervalued.

[m180] 22/10/2007 11:23

Wow All my portfolio showing red for the day, except dominos which is
showing blue !!! Never thought I'd see that day come :o)

[mdj8] 18/10/2007 17:47

I think we may need to step back a little. The main prob that I recall in the recent past was with the running of one of the larger franchises, regarding the owners alleged dishonest and poor treatment of employees. Hemsleys reaction to the issue was basically he was unconcerned and the majority of franchisees did a great job. Obviously he had to balance keeping his main money earner happy against the allegedly affected staff but I personally feel he did a bad job and during interviews did not seem interested in the affected employees welfare. In doing so I feel he underestimated the damage such allegations against one franchisee can do to the overall brand and therefore the whole business, including those franchisees that do treat people fairly. Hemsleys first priority should always be to enhance, protect and support the Brand. Had I been considering opening a Dominos I would now have to think long and hard, about the potential for the actions of another Dominos franchisee to affect my business, which may be the way other potential franchisees are thinking.

In addition I recall problems with securing planning permission for sites they have already acquired.

Finally look at the economy/credit crunch - what comes first paying the mortgage or ordering a Dominos.

All these issues will affect the companys ability to grow. Yes they may have performed well to June which will be shown in the results but the share price needs to reflect the prospects for potential growth, which to me looks substantially less rosy than it did 4 or 5 months ago.