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According to Berkshire Hathaway’s (BRK.A) (BRK.B) latest 13F filing, the conglomerate picked up a new stake in Domino’s Pizza (DPZ), adding 1.28 million shares during the third quarter. Berkshire’s new position in DPZ coincides with continued net selling of equities by Warren Buffett’s trillion-dollar company, which trimmed holdings in Apple (AAPL) and Bank of America (BAC) during the period, as well as Brazilian fintech Nu Holdings (NU), which spent most of this year as the top-performing stock among the Berkshire equity portfolio.
Berkshire also added a new position in Pool Corp (POOL) during Q3, picking up a smaller stake of 404K shares, and exited its Floor and Decor (FND) stake.
DPZ is up more than 7% in after-hours trading as investors react to the news. Valued at $15.17 billion by market cap, DPZ pays a quarterly dividend of $1.51 that yields 1.37% at current levels.
With a forward price-to-earnings (P/E) ratio of 26.29 and a price-to-sales (P/S) ratio of 3.20, Domino’s stock isn’t the cheapest Buffett-style value play on Wall Street. However, DPZ trades at a slight discount to its historical average premiums, and continues to expand its free cash flow margins.
DPZ has pulled back by 20% from its 52-week highs, set in April. The stock is rated a “moderate buy” among analysts, with the average price target of $483.40 implying expected upside of about 11% from today’s closing price.
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