DPZ. I've been patiently waiting for the right time to call the short entry on this one. Nows the time. It just hit 198.90 before I logged in to post this. It just fell $.40
Yeah, its an all time high. And I know thats not the best time to make a call... and note, it was just a call. I'm not in as I unfortunately only have so much to play with (stocks... not my option shenanigans which is casino money)...the lions share of which is tied up in SJM right now... so I only threw this out there for the record. But why bearish? Robert.... again its the Peter Lynch in me. Pizza wars are going nuclear. Watch the NBA tournament. PAPA and Pizza Hut are spending ad dollars like nuts, cutting prices. Its a race to the bottom here. Little Ceasars has expanded their (nasty) Hot and Ready selections to various deep dish pies... Nestle is heavily promoting DiGiornos. And then there's DPZ's PE. Too high imo with this much competition. The other players have caught up with DPZ's once leading technology prowess. Then there's my actual channel checks. They're slowing down. I mean its noticeable. I watch three of them regularly when I'm out and about. Call me weird lol... but I actually enjoy this stuff...taking note of the time of day, especially peak times, and how busy they are with walk-ins and delivery vehicles sitting idle. Its changed over the last year. I just don't see the growth justifying that forward PE. YOY comps are gonna be hard to top. Target? Back to the mid to upper $180's. And probably lower. It could take out $200 though... as these things go. Stocks hitting all time highs do seem to like big round numbers. But it will decline into the ER.
I can't believe how high most of these pizza and fast food chains have rallied over the years...if you ask anyone you know if they eat dominoes pizza they will tell you straight out NOOOOO. They find the pizza fake, disgusting and too greasy. They don't even call it pizza. I just find it amazing that if you ask 100 people if they eat dominoes pizza about 95 out of 100 will say no that they mostly frequent regular family owned pizza shops...so who is buying this dominoes pizza ?? And how much higher can this stock go along with all the other franchises out there like Buffalo wild wings and panera breads??
Part of the reason for some stocks including DPZ being at highs is ETF holdings https://www.etfchannel.com/symbol/dpz/
The same people who buy other fast-foods like BK, KFC, McD, Taco Smell. Cheap, fast and convenient. A bit of laziness is involved there also. When it comes to pizza however, I would NEVER go the route of Papa Crohn's, Pizza Smut, Little Ceasar's seizure, Papa (Geronimo-to-your-taste-buds) Ginos, Chuck E. Jesus-H-Christ-what-is-this-crap Cheese, My-health-is-falling-like-Dominoes, and Sbarro (WTF, is it the S or B that is silent? Ack!) The only good pizza you can find is in the local mom-and-pop shops in the NY tri-state area. Some others will claim Chicago, but I digress. The fast-food pizza shops are doing well because of the aforementioned convenience and laziness of the consumer, along with dulled palates.
I agree with the logic, but hate the chart in this environment, but you are right, pizza places are a dime a dozen these days, and there is so many places that do it better than just Pizza hut and Dominos it seems,Millenials especially seem to be willing to pay a premium, for a better product than just the McDonalds of pizza. But that chart, looks like 200 break IMO, just cause we are in a market that never goes down. With that said, Price action today kind of seems like its got a lot of people looking to sell the 200 area, id wait for it to react at 200 first, if it gets stuffed at 200, its over.