Domino’s Pizza Enterprises is under Algo Engine sell conditions and is a current “high conviction” short.
A combination of underperforming international stores and an eroding position within technological leadership across fast food means we struggle with the 30x PE multiple and low 2.5% yield.
Within 2 – 5 years we forecast the business trades at 14x earnings and 4% yield, meaning the fair value is closer to $20, not the current price of $52.
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Incitec Pivot was triggered as an Algo Engine buy signal on Thursday 21st November. With an improving outlook for earnings in FY20 & 21 we’re willing to take a closer look at the upside potential.
The short-term technical indicators are about to turn positive and we’re likely to see buying interest pick-up near the $3.20 support level.
We’ll revisit this opportunity as the entry conditions playout next week.
Level 29 Chifley Tower
2 Chifley Square
Sydney, NSW 2000
1300 614 002
Investor Signals Pty Ltd
ABN 44 143 555 453
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