Pershing Square Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. An annual portfolio net return of 26.9% was recorded by the fund for the whole year of 2021, versus the S&P 500 Index, the FTSE 100, and MSCI World Index that delivered a 28.7%, 17.4%, and 22.3% return respectively for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Pershing Square Capital Management, in its Q4 2021 investor letter, mentioned Domino’s Pizza, Inc. (NYSE: DPZ) and discussed its stance on the firm. Domino’s Pizza, Inc. is an Ann Arbor, Michigan-based restaurant company with a $15.8 billion market capitalization. DPZ delivered a -22.81% return since the beginning of the year, while its 12-month returns are up by 17.27%. The stock closed at $435.62 per share on February 19, 2022.
Here is what Pershing Square Capital Management has to say about Domino’s Pizza, Inc. in its Q4 2021 investor letter:
“Domino’s is a high-quality business with significant long-term growth potential led by a strong management team.
Global #1 QSR pizza brand with attractive business model
-Category leader with crown jewel digital and delivery infrastructure
-Long-term same-store sales growth of 7% in the U.S. and 5% internationally
-Exceptional unit economics underpin long runway for global store growth
-Optimal capital allocation enabled by near-100% franchised business modelMany levers in place for sustainable growth post-COVID
-Recent large price increases by competitors enhances DPZ’s customer value proposition and provides latent pricing power
-New products, peak advertising funds, and the eventual return of key promotions
-Carryout orders still below 2019 levelsTrades at a discounted valuation
-High certainty nature of the business, consistent capital allocation, and prospective long-term EPS growth in the mid- to high-teens.
DPZ’s share price including dividends increased 58% from our average cost at inception to December 31, 2021, and has decreased 22% year-to-date in 2022.”
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Our calculations show that Domino’s Pizza, Inc. (NYSE: DPZ) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. DPZ was in 31 hedge fund portfolios at the end of the third quarter of 2021, compared to 36 funds in the previous quarter. Domino’s Pizza, Inc. (NYSE: DPZ) delivered a -18.67% return in the past 3 months.
In December 2021, we also shared another hedge fund’s views on DPZ in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
