Stock Picks
The “Santa Clause Rally” might have hit the pause button due to the new Omicron coronavirus variant, but that doesn’t mean opportunities in the market stopped.
EasyResearch looks at 2 stocks across EasyWallets
EasyAUD
Domino's Pizza Enterprises Limited (DMP)
It's time to roll the dice and order some grease frisbee's this December at one of the globe's popular retail food outlets and dual-listed stock, Domino's Pizza.
The pizza chain operator has been a growth stock to watch over the long run and can continue its growth pattern for years to come despite near-term headwinds. Yes, you guessed right, those near-term headwinds include the recent omicron variant and competitors chipping away at market share.
One of the competitors to watch in the space is Pizza Hut, which falls under the Yum! Brands, Inc. (NYSE: YUM) umbrella. Yum develops, operates, and franchises quick-service restaurants worldwide, and its Pizza Hut brand wants to double in size over the next four years. Pizza Hut has been growing steadily since the Covid-10 onset and has taken around 7% of the market share, but luckily for Domino's, they are still small in comparison.
- Share Price: AU$ 125.06
- Market Cap: AU$ 10.82 billion.
- P/E Ratio: 59x
- P/B Ratio: 27.1x
- Dividend (Annual Yield %): 1.33%
- Franking: 70%
- 52 Week range low of AU$ 73.23 and AU$ 167.15 share high.
Outlook – Domino’s has a dominant store network around the globe and has estimated that it would double its footprint over the next decade. This boasts well for the bottom line over the long-term if sales growth also keeps pace. The company is also turning its focus to technology to stay abreast with the changing environment, which has seen Goldman Sachs remain positive.
Goldman has a buy rating on the pizza chain and a price target of $147.00 a share.
Login to EasyWallets to view shares
on EasyEquities
EasyUSD
The Amazon of Latin America, MercadoLibre, has been a booming business since the start of the coronavirus pandemic. The online commerce platform could be one to watch this holiday season as the next wave of infections forces shoppers back online to do their Christmas shopping.
MercadoLibre has all the elements of a winning recipe; it has an e-commerce platform to rival Amazon, a PayPal payment solution with Mercado Pago, and shipping across with Mercado Envios.
The company showed why it is such an attractive option for investors in its Q3 results, even at current valuations. Volume sold on its e-commerce platform rose 30%, while Mercado Envios, the logistics division, saw shipments increase by 32% year-over-year. While payment volume grew 59% on a currency-neutral basis, the payment solution Mercado Pago also introduced the option to buy, sell, and hold cryptocurrencies in Brazil.
- Share Price: $ 1 104.20
- Market Cap: $ 55.72 billion.
- P/E Ratio: 693.83x
- P/B Ratio: 453.1x
- Dividend (Annual Yield %): N/A
- 52 Week range low of $ 1 104.04 and $ 2 020 share high.
Outlook – The growth stock's recent downturn was due to a broader market sell-off in growth stocks from tightening U.S monetary policies, and rising interest rates make this sector less attractive. Despite this, the Latin American e-commerce and digital payments giant's core business is firing on all cylinders, as was seen in its third-quarter results. None of its business segments are lagging, and its Revenue increased 73% in the third quarter, setting it up nicely for the end of the year, which is also traditionally the best quarter for the business.
Login to EasyWallets to view shares
on EasyEquities
Informed decisions
Seasonal patterns have come and gone this year, with some INVSTRs still hoping to see a 'Santa Rally’ towards the end of the month. The famed Santa Clause Rally usually takes place the last week of December and ends after the second trading day in January.
The speculation as to why this phenomenon occurs is that a general feeling of optimism drives the market. Yes, we all need some of that goodness this year, and into the new year, we go!
New to investing
and want to know more about our other stock picks?
Read: Top 3 most bought Ozzy stocks
Sources –EasyResearch, Domino's Pizza Enterprises Limited, MercadoLibre Inc, Keithen Drury, Jeremy Bowman, KoyFin, Bloomberg, Australian Securities Exchange (ASX), Yahoo Finance.
Take note: Stock data was taken on 3 Dember 2021.
Follow Barry Dumas
@BEEF_FINMARKETS
Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.
