Domino’s Pizza (NYSE:DPZ)
UBS indicated that Domino’s Pizza stock is a top option in a research report that outlined investor sentiment toward the restaurant industry.
Starbucks Corporation, McDonald’s Corporation, and Yum! Brands are the “most crowded longs” in the restaurant space, as determined by the analysts working for the Swiss bank; on the other hand, Wendy’s Corporation and The Cheesecake Factory are the “most popular shorts” in this industry. However, the quantitative research team at the bank advised that a better indicator of future performance is whether or not a stock that was already crowded has become even more crowded over the most recent three months. This question forms the basis of a two-factor crowding momentum score.
According to the findings of the team, the companies that scored the highest in this examination were Domino’s Pizza (NYSE:DPZ), Jack in the Box, Portillo’s, Papa John’s, and Wingstop. Wendy’s and Cracker Barrel received the lowest possible scores following the two-factor system.
The team wrote, “Conversations suggest Domino’s Pizza stock sentiment has improved over the past month, consistent with crowding scores.” This is likely due to some anticipated improvement in recent sales checks and trends, the possibility of an eventual announcement regarding a 3P delivery partnership lowered expectations, and an investor event later in the year. “Yet, we are taken aback by the extent of the positive crowding in the DPZ compared to some counterparts. We prefer DPZ because it continues to show positive indications in our study… The only stock we give a Buy rating to and for which crowding data provides a positive indication is DPZ.
In other news, Potbelly and Dine Brands are said to be exhibiting good progress in their respective markets. In the meanwhile, Dutch Brothers, Krispy Kreme, Kira Sushi, and Sweetgreen were given a negative momentum rating along with poor crowding ratings. This was because the quantitative team had warned about negative momentum in recent months.
Featured Image: Pexels @ Leonardo Luz
