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Is Domino’s Pizza (DPZ) a Multibagger Stock?

LRT Capital Management, an investment management firm, released its October 2022 investor letter. A copy of the same can be downloaded here. The results in October were excellent, and its LRT Economic Moat strategy returned 7.38%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

LRT Capital discussed stocks like Domino’s Pizza, Inc. (NYSE:DPZ) in the investor letter. Headquartered in Ann Arbor, Michigan, Domino’s Pizza, Inc. (NYSE:DPZ) is a pizza company that operates worldwide. On November 16, 2022, Domino’s Pizza, Inc. (NYSE:DPZ) stock closed at $364.47 per share. One-month return of Domino’s Pizza, Inc. (NYSE:DPZ) was 14.08%, and its shares lost 32.11% of their value over the last 52 weeks. Domino’s Pizza, Inc. (NYSE:DPZ)  has a market capitalization of $12.902 billion.

LRT Capital made the following comment about Domino’s Pizza, Inc. (NYSE:DPZ) in its October investor letter:

"Domino’s Pizza, Inc. (NYSE:DPZ) is the world’s largest franchisor of pizza restaurants with over 13,800 locations in 85 countries. As for any restaurant operator, the key metric to consider for Domino’s Pizza is same-store-sales (SSS) growth. Growing same-store-sales are ultimately how a restaurant business increases earnings from its existing assets. The company continues to impress in this criterion with SSS having grown in the U.S. for 40 consecutive quarters, and an astounding 109 straight quarters internationally.

Two-thirds of the company’s stores are currently abroad, and the international segment remains the company’s largest growth opportunity, as the penetration of convenient fast food remains lower abroad than in the United States. Pizza is a product with exceptionally high gross margins, one that “translates” well across different cultures, and one that literally “travels well”, not losing much of its appeal when delivered in a cardboard box. The rise of 3rd party delivery platforms such as Uber Eats, Doordash and Grubhub is challenging the pizza category as it has expanded the number of choices consumers have for convenient takeout. However, the economics of food delivery remain challenging for most restaurants and platforms alike25, while pizza delivery continues to be highly profitable. Regardless of how the “delivery wars” currently playing out end, Domino’s financial results show little impact of this increased competition, and the company continues to deliver exceptional financial performance…" (Click here to read the full text)

India Picture/Shutterstock.com

Domino’s Pizza, Inc. (NYSE:DPZ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Domino’s Pizza, Inc. (NYSE:DPZ) at the end of the third quarter which was 32 in the previous quarter.

We discussed Domino’s Pizza, Inc. (NYSE:DPZ) in another article and shared the best Reddit stocks to invest in. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.