Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Domino’s Pizza, Inc. (DPZ), Papa John’s Int’l, Inc. (PZZA): Buying This Stock on Weakness

The competition

The competition within the quick service pizza category is stiff; everyone from the mom & pop shops to the big boys are vying for market share. Look, I despise the product portfolio of Papa John’s Int’l, Inc. (NASDAQ:PZZA) but nonetheless, let’s take a look the company. Papa John’s Int’l, Inc. (NASDAQ:PZZA) expects to open 230 to 260 units in 2013 with the majority of these locations in international markets. Earlier this year management stated it would be looking to make a dent in China by the addition of many more stores in the years ahead. With the addition of 500 location over the next five years, the company’s store count is set to nearly triple!

The more diversified quick service restaurant player, Yum! Brands, Inc. (NYSE:YUM), offers investors great exposure to both China and the quick service restaurant category. Through its Pizza Hut brand, Yum! Brands, Inc. (NYSE:YUM) in a strong position to benefit from rising demand for pizza internationally. A number of food quality problems have hurt the company’s reputation over the last year, however, the company has worked hard to re-establish its reputation. On the most recent Domino’s Pizza, Inc. (NYSE:DPZ) conference call management made it clear that rising incomes and employment are the key drivers to pizza sales as pizza is a discretionary good. Rising wage growth within China should bode well for the entire quick service restaurant category within the region.


I would use any weakness as a long term buying opportunity when it comes to Domino’s Pizza, Inc. (NYSE:DPZ). The company just reported a great quarter by all traditional metrics and confirmed yet again the international growth thesis. Its larger competitions have lost market share to the company over the last few years, however, they remain a threat within Asia.

The article Buying This Stock on Weakness originally appeared on and is written by Nathaniel Matherson.

Nathaniel Matherson has no position in any stocks mentioned. The Motley Fool owns shares of Papa John’s International (NASDAQ:PZZA). Nathaniel is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.