Domino's Pizza (DPZ) Strong On High Relative Volume Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Domino's Pizza ( DPZ) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Domino's Pizza as such a stock due to the following factors:

  • DPZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.7 million
  • DPZ has traded 332,454 shares today
  • DPZ is trading at 4.6 times the normal volume for the stock at this time of day
  • DPZ is trading at a new high 3.043323924748400077788801354472525417804718017578125 above yesterday's close

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on DPZ:

Domino's Pizza, Inc., through its subsidiaries, operates as a pizza delivery company in the United States and internationally. The company operates through three segments: Domestic Stores, Supply Chain, and International Franchise. The stock currently has a dividend yield of 1.1%. DPZ has a PE ratio of 38. Currently there are four analysts that rate Domino's Pizza a buy, one analyst rates it a sell, and seven rate it a hold.

The average volume for Domino's Pizza has been 425,000 shares per day over the past 30 days. Domino's Pizza has a market cap of $6.16 billion and is part of the services sector and leisure industry. The stock has a beta of 0.66 and a short float of 5.7% with 8.92 days to cover. Shares are up 18.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Domino's Pizza as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, increase in net income and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 10.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • DOMINO'S PIZZA INC has improved earnings per share by 14.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DOMINO'S PIZZA INC increased its bottom line by earning $2.86 versus $2.47 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $2.86).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 14.4% when compared to the same quarter one year prior, going from $40.47 million to $46.29 million.
  • Net operating cash flow has significantly increased by 134.07% to $84.75 million when compared to the same quarter last year. In addition, DOMINO'S PIZZA INC has also vastly surpassed the industry average cash flow growth rate of -11.65%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 56.36% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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