Pizza Topping

The last few days have been tumultuous for FANGs (as we feared if their COVID-advantages dissipated).

How has that worked out for Domino’s? The chart above shows the last 5 trading days.

In the MBMG Flash last month ‘Too Damn Hot’ we wondered whether it was time for the so-called FANG stocks to jettison underperformers (Facebook [FB], Amazon (AMZN) & Alphabet[GOOG]) and replace them with Domino’s Pizza (and allow Microsoft and Apple to become full FANGs rather than honorary ones like kids hanging around with the gang but never allowed to join).

This would have changed the acronym to DAMN (Domino’s, Apple, Microsoft and Netflix)

We said at the time “In short, DPZ has produced high, FANG-like returns and these haven’t been achieved without substantial risk. However, as FANG stocks themselves now represent extreme systemic and idiosyncratic risks, DPZ may be a useful diversifier, especially during the election period. We believe that a protracted or disputed election outcome may be negative for all stocks but at least for DPZ that may also coincide with strong sales that helps mitigate that.”

Surprisingly, there are still some money managers out there who readily admit that Domino’s isn’t on their radar and they’re unaware of the long term correlation between Domino’s and the FANGs…Isn’t that their job?

MBMG Investment Advisory is licensed by the Securities and Exchange Commission of Thailand as an Investment Advisor under licence number Dor 06-0055-21.

For more information and to speak with our advisor, please contact us at info@mbmg-investment.com or call on +66 2 665 2534.

About the Author:

Paul Gambles is licensed by the SEC as both a Securities Fundamental Investment Analyst and an Investment Planner.