Today’s Falling Knife: Domino’s Pizza Group PLC Slides 7%

Domino’s Pizza Group PLC (LON:DOM) hit by significant shareholder selling.

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Shares in Domino’s Pizza (LSE: DOM) plunged 6.9% in trade today following a brace of bad news for the company.

Firstly, Jubiliant FoodWorks — the firm that runs and operates Domino’s chains in India — posted the lowest ever same-store sales growth since it listed in 2010, 6.3%, while the quarter taking in January-March saw the first time the figure slipped into single digits, at 7.7%, compared to previous highs of around 40%.

Secondly, both the chairman Stephen Hemsley and prominent shareholder Nigel Wray sold significant amounts of stock in the company; the latter had owned 3% of the business but sold his entire stake for a total of £28m. Hemsley cashed in to the tune of £3.42m, while chief financial officer Lee Ginsberg sold £404,600 worth of shares one week previously.

When management are selling shares, many believe the vultures are circling on this growth story. Last week saw Domino’s admit to investors that its German operation would take longer to become profitable than it had originally guided, and a £11.1m impairment charge sent the shares down 8% in a single day.

The shares had begun to recover as contrarian investors spied a buying opportunity, but the latest news conspired to drag them down once more.

If you are looking for alternative investment opportunities with the potential to soar, we’ve pinpointed our favourite growth share and produced a special report in which we evaluate its finances, risks and growth prospects going forward. 

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> Sam owns shares in Domino’s Pizza.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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