Delian Naydenov

Domino's Risks Outweigh The Benefits


This may be a good time for investors to harvest their gains from Domino's Pizza (NYSE:DPZ). The company's common stock has appreciated over 67% from the time I last discussed it here in October 2012, compared to gains of 31% for competitor Papa John's (NASDAQ:PZZA) and 15% for the S&P 500 index (see graph).

In addition, rising agricultural commodities and gas prices and declining consumers' real incomes could provide headwinds for the rest of the year and beyond. Finally, Domino's financial and operational position could be negatively affected due to the following major factors:

    High leverage, High calorie menu with no healthy choices, Dependence on ad spending, and Limited growth opportunities in the domestic marketplace. ...
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