Why Jim Cramer Says Buy Domino's Pizza (DPZ) Stock Despite Cheese Price Increase

NEW YORK (TheStreet) -- TheStreet's Jim Cramer says investors panic every time they hear gross margins are decreasing as raw costs are increasing. So it took people's breath away when Domino's Pizza  (DPZ) CEO Patrick Doyle said on a conference call late last week that the price of cheese has risen, but Cramer says it should not have caused such a reaction.

Cramer points out that this is a problem for the company-owned stores , which are very small because Domino's is largely a franchise model. He calls this an opportunity to buy a high-quality stock even though some investors think the chart is not that good and the numbers have not bumped enough.

Cramer notes the stock went from $10 to $80 since Doyle took over and has now pulled back to the low $70 range. That, he says, is an opportunity to buy, not sell.


Separately, TheStreet Ratings team rates DOMINO'S PIZZA INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate DOMINO'S PIZZA INC (DPZ) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

If you liked this article you might like

North Korea Leader Kim Jong Un Warrants Your Attention, Silly Investor

Domino's Pizza CEO Thinks Self Driving Cars Will Deliver Pizza in 10 Years

Domino's Pizza CEO: In 10 Years,Self-Driving Cars Will Deliver Pizza

Sorry Elon Musk but Artificial Intelligence Grows Jobs: Domino's Pizza CEO