Domino's Pizza Enterprises Ltd (ASX: DMP) shares are in the green today.
Shares in the S&P/ASX 200 Index (ASX: XJO) fast food pizza retailer closed yesterday trading for $18.13. In late morning trade on Tuesday, shares are changing hands for $18.20 apiece, up 0.4%.
For some context, the ASX 200 is up 0.1% at this same time.
While today's modest outperformance will come as welcome news to shareholders, it's unfortunately far from par for the course for the struggling, global pizza company.
But with Domino's shares down 45.8% since this time last year, Morgans' Damien Nguyen believes now is a good time to buy the very steep dip on the beaten-down stock (courtesy of The Bull).
Should I buy Domino's shares today?
"Domino's was sold off aggressively on July 2 following the shock resignation of its chief executive officer. The shares closed at $16.96 on July 2. The shares were trading at $18.19 on July 17," said Nguyen, who has a buy recommendation on Domino's shares.
Domino's made the unexpected announcement that Mark van Dyck was stepping down as CEO and managing director on 2 July.
"With a clear strategy and strong team in place, I believe the time will be right at the end of this calendar year to hand over to the next CEO," Van Dyk said on the day. "My focus in the months ahead will be on supporting a smooth transition."
Domino's stock closed down 15.8% on the day. And shares are still trading a touch below the $20.14 a share closing price posted on 1 July, the day prior to the announcement.
But Nguyen believes the future is now looking brighter for Domino's shares.
"Substantial shareholder and chairman Jack Cowin has assumed the role of executive chair on an interim basis, which has allayed some investor concerns," he said.
Cowin is in fact the largest shareholder in Domino's. He is also the chairman and managing director of the CFAL Group, which operates Hungry Jack's.
When reporting on Van Dyk's departure as CEO, the Domino's board noted that under Cowin's leadership, CFAL has grown to annual revenues of more than $2.4 billion. Cowin was also credited for leading Domino's expansion into Europe and Asia.
Looking ahead, Morgans' Nguyen said, "The company is focused on improving margins and refocusing on franchise operations, which, we believe, could deliver strong share price returns in the long term."
With Domino's shares down almost 46% in a year, he concluded, "We view the current share price as an attractive entry point for long term growth investors."
