Warren Buffett Has Developed an Appetite for Domino's Pizza Stock. Should Other Investors Join In?

Motley Fool11-24 15:45

Domino's Pizza has far outperformed the S&P 500 since its 2004 IPO. With a vast global footprint, store growth has slowed. Investors should not necessarily assume that every Berkshire ...

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Should Other Investors Join In?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-24 15:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/11/24/warren-buffett-has-developed-an-appeitite-for-domi/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Domino's Pizza has far outperformed the S&P 500 since its 2004 IPO.\n\n\n\n\n\n\n\nWith a vast global footprint, store growth has slowed. \n\n\n\n\n\n\n\nInvestors should not necessarily assume that every Berkshire ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/11/24/warren-buffett-has-developed-an-appeitite-for-domi/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE00BK4W5L77.USD","symbol_name":"HSBC GLOBAL FUNDS ICAV US EQUITY INDEX \"HC\" (USD) ACC","start_time":0,"source_url":"https://www.fool.com/investing/2024/11/24/warren-buffett-has-developed-an-appeitite-for-domi/","article_id":"2485976601","we_media_id":null,"thumbnails":["https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F798477%2Fhappy-friends-eating-pizza-selfie.jpg&op=resize&w=165&h=104"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2485976601","pubTimestamp":1732434300,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"Domino's Pizza has far outperformed the S&P 500 since its 2004 IPO.With a vast global footprint, store growth has slowed.Investors should not necessarily assume that every Berkshire Hathaway holding is suitable for them.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00BK4W5L77.USD":"HSBC GLOBAL FUNDS ICAV US EQUITY INDEX \"HC\" (USD) ACC","BK4532":"文艺复兴科技持仓","SPXU":"三倍做空标普500ETF","ISBC":"投资者银行","OEF":"标普100指数ETF-iShares","IE00BK4W5M84.HKD":"HSBC GLOBAL FUNDS ICAV US EQUITY INDEX \"HC\" (HKD) ACC","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0683600562.USD":"AB SELECT US EQUITY \"A\" (USD) ACC","BK4534":"瑞士信贷持仓","BK4585":"ETF&股票定投概念","LU0157215616.USD":"FIDELITY GLOBAL FOCUS \"A\" INC","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","IE000M9KFDE8.USD":"NEUBERGER BERMAN US LARGE CAP VALUE \"A\" (USD) ACC","BK4211":"区域性银行","LU0971096721.USD":"富达环球金融服务 A","SPY":"标普500ETF","LU0251131958.USD":"FIDELITY AMERICA \"A\" (USD) ACC","BK4524":"宅经济概念","VOO":"Vanguard标普500ETF","DPZ":"达美乐比萨","LU0154236417.USD":"BGF US FLEXIBLE EQUITY \"A2\" ACC","LU1201861249.SGD":"Natixis Harris Associates US Equity PA SGD-H","BK4559":"巴菲特持仓","LU1571399168.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"IP\" (USD) ACC","SDS":"两倍做空标普500ETF","BK4550":"红杉资本持仓","BK4588":"碎股","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","OEX":"标普100",".SPX":"S&P 500 Index","UPRO":"三倍做多标普500ETF","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","SH":"标普500反向ETF","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","IPO":"Renaissance IPO ETF","BK4176":"多领域控股","IVV":"标普500指数ETF","BRK.B":"伯克希尔B","LU0234572021.USD":"高盛美国核心股票组合Acc","SSO":"两倍做多标普500ETF","BRK.A":"伯克希尔"},"translate_title":"沃伦·巴菲特对达美乐披萨股票产生了兴趣。其他投资者应该加入吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"IPO":1,"ISBC":1,"DPZ":1,"BRK.B":1,"BRK.A":0.9,"VOO":0.62,"SPY":0.62,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,"ESmain":0.6,"IVV":0.6,".SPX":0.6},"content_text":"Domino's Pizza has far outperformed the S&P 500 since its 2004 IPO.\n\n\n\n\n\n\n\nWith a vast global footprint, store growth has slowed. \n\n\n\n\n\n\n\nInvestors should not necessarily assume that every Berkshire Hathaway holding is suitable for them.\n\nWarren Buffett's Berkshire Hathaway recently released its latest 13-F filing to the Securities and Exchange Commission (SEC). Buffett's team has been a net seller of stocks in recent quarters. Hence, it may have come as a surprise to many analysts when it opened a position in Domino's Pizza (DPZ 1.68%) stock.The news led to a temporary bump in the average share volume of Domino's stock and its stock price. However, investors buy individual stocks for many reasons, and not all billionaire stock picks are suitable for the average investor. Thus, investors need to take a closer look at Domino's before deciding whether to feast on this pizza stock.Domino's Pizza explainedDomino's is the world's largest pizza company. It operates nearly 21,000 locations in more than 90 countries and serves about 1 million customers daily. Franchisees own around 99% of its locations.The company has focused on expansion since after its founding in Ypsilanti, Michigan, in 1960. Nonetheless, it waited until 2004, when it had grown to approximately 7,500 global locations, before launching its initial public offering (IPO) in July of that year. Since then, it has produced a total return of nearly 7,000%, far outpacing the S&P 500.DPZ Total Return Level data by YCharts.Although the company has not outlined a specific total growth goal in its reports, it believes it can still add thousands of new locations worldwide. It had previously guided for approximately 1,100 net new stores annually, including about 175 in the U.S.Berkshire and Domino's PizzaAlthough the SEC requires Berkshire Hathaway to issue a 13-F filing of its stock holdings every quarter, it bears no obligation to explain its purchases and sales, and the company's filings offer little insight as to why Buffett's team has chosen to invest in this stock.The most likely explanation is that Berkshire bought the stock following the company's earnings for the second quarter of fiscal 2024 (ended June 16) on July 18. At that time, Domino's stock fell by 14% in the following trading session as the company scaled back forecasts for international store growth. From that point, the stock made few net gains before beginning a recovery in September.Moreover, the company reported only 72 net store openings in the fiscal Q3 (ended Sept. 8), indicating it is no longer a fast-growing company. Plus, in fiscal Q2, Domino's suspended guidance on 1,100 annual net new stores globally, which likely rattled some investors.The lower stock price has taken the price-to-earnings (P/E) ratio down to 27. Nonetheless, investors are likely to perceive that multiple as expensive. In the first three quarters of fiscal 2024, revenue of almost $3.3 billion rose 6% yearly, a level unlikely to inspire investors to pay a premium.Domino's also reported $415 million in net income, which rose 15% over the previous year as other income and interest income grew at a faster pace. Still, analysts expect a profit increase of only 6% next year, a significant slowdown from the current year.Furthermore, Domino's shareholders earn $6.04 per share in yearly dividends. However, with a dividend yield of 1.4%, it barely beats the 1.25% average for the S&P 500. Such results leave investors without an obvious reason to take an interest in this stock.Should you follow Buffett's team into Domino's Pizza stock?Considering Domino's as a company and its financials, most investors should likely pass on Domino's stock.Admittedly, Domino's will likely earn positive returns for its shareholders over time. Nonetheless, average investors have to remember that they are not Buffett or his team.Berkshire's massive size often means it has fewer opportunities to find stocks with market-beating returns. Moreover, average investors should remember that a bank can only preserve a relatively small amount of liquidity. Since it already owns $288 billion in Treasury bills,Berkshire may have bought this stock simply to protect its wealth and collect a modest dividend.As a company, Domino's will probably continue a slow, steady expansion. However, as an investment, average investors can probably earn higher returns in other stocks.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2485976601"}