DMP (ASX) Ann: FY22 Full-Year Market Presentation

Originally posted by desertredlion: ↑

These brokers are so unaccountable. They seem to simply add 15% to the share price and a "buy" recommendation if the price is going up. And a "sell" recommendation with 15% lower target price if shares are trending down. They pumped retail stocks like Kogan, City Chic, Adairs etc. last year. Now the shares are up to 50% lower and falling you'd think it's a strong buy. Nope. "Sell due to valuation versus peers" or "downgrade due to inflation risk" with target price 30-50% lower. I don't know how they keep getting away with it.

Not to mention the fundamentally unsound BNPL stocks. There's always a bull and a bear case for any stock (including DMP). It feels like if the share price is falling they react by publishing the bear case to justify their positions. So they're reacting to the price fall, rather than the fundamentals.

I read an academic article a while ago which concluded that broker recommendations have no predictive value. That is, shares could go either up, down or sideways. Useless! But kind of comforting in a way. They were recommending CHC at all time high $21 but l didn't buy. I picked some up recently for $12.50. I'm sure the brokers were recommending DMP at $160 too but it's always seemed too expensive for my liking. Gaurav Sodhi from The Intelligent Investor is a Domino's fan and I respect his analysis.

The good thing about this downtown is quality growth stocks have suddenly appeared on my radar. I love what DMP has been able to achieve. While I'm sceptical about inflation pressures and debt, it's likely to rebound hard once inflation eases and rates stop rising. I'm starting to see value in likes of DMP, BRG, REA, ARB, and MQG.

My portfolio has been heavily weighted towards oil and gas since 2020. I've sold down about 40% of it over the last two months. Am still very overweight oil and gas so probably in the same place as you. We only have one stock in common, but I find that over half of the companies on the footnote part of your posts are on my watchlist / wishlist; to hopefully take a small position at the right price and build slowly over time.

I can see with Domino's an opportunity to double one's money in the next couple of years. The likes of Telstra or ANZ may outperform by a few percent in the short term, but in 24 months I wouldn't be surprised to see DMP at $120 for a 100% return.

I've had the same thoughts about selling everything as well. Instead I've fairly savagely sold down about a third of my portfolio over the past two months and added it to existing dry powder. I've sold some stuff I should have kept. Kept some shares I should have sold. Not been brave enough to deploy cash during the correction last month. As you say, thems the breaks, I guess. I still can't understand the rebound with rampant inflation, poor/no earnings guidance, and no end in sight to rate rises.

I hope for holders' sake the price has bottomed out here at $65.00. Domino's is clearly a great company with lots of growth ahead. I'm certainly keen to take an initial position if the weakness continues. The biggest downside I see at $65 is over-paying for growth that's too slow to occur with a low 30s PE multiple. It's not an operational risk, as the company is excellent and clearly good at what they do.

All the best to all DMP holders.

Expand

Great reply!

In the book "The Tao of Charlie Munger " by David Clark quote #34 reads:

" You do get an occasional opportunity to get into a wonderful business that's being run by a wonderful manager and of course that's hogs heavens day"

I believe that this quote above applies to Dominos; but there's a number of ASX listed stocks i hold that are just superb businesses, with not only great management, but an enduring competitive advantage. The secret for successful investing , I think, is being willing to pay up for the privilege of owning these as they are ~~always~~ most of the time, looking expensive.

As a side note congratulations on your foresight to load up on fossil fuels. That contrarian trade is going to beat the market for years to come IMO!

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(20min delay)
Last $36.12		Change 0.050(0.14%)		Mkt cap ! $3.284B

Open	High	Low	Value	Volume
$36.35	$36.42	$35.85	$8.863M	245.5K

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