Domino's plummeted 25% - should it be in your portfolio?
Domino's Pizza (ASX: DMP) plunged 25% on Wednesday after CEO Mark van Dyck abruptly resigned only eight months into the role.
It's the latest setback for a company already under pressure, having written down $103.5 million in store values earlier this year, basically admitting that some locations, particularly in Japan and France, weren't performing.
So, with the share price now at rock-bottom levels, the real question is: Is this the moment to snap up Domino's as a bargain, or is it time to let this one go for good?
The challenges are real: store closures, negative free cash flow, and litigation risks in Europe have all shaken confidence. Even JPMorgan dumped its stake in June, signalling institutional caution.
Leadership uncertainty adds to the concerns. Founder Jack Cowin is stepping in as interim executive chair while they search globally for a new CEO, providing short-term stability but leaving longer-term strategy in question.
Yet, it's not all doom and gloom. Domino's does have a turnaround plan: closing or refranchising weak stores, boosting digital efficiency via its OneDigital platform, and targeting over $18 million in annual cost savings.
Plus, it still has nearly $285 million in undrawn credit to shore up operations.
From a value perspective, a lot of bad news is already priced in and that's often where opportunities emerge. But this isn't a buy-at-any-price stock. Dominos has been falling steadily since its $167 peak in 2021, and just because it's under $20 now doesn't make it a bargain.
Technically, there is some short-term support around current price levels, but a break below $15 could see the share tumble towards $5, while a strong move back above $20 would suggest confidence is returning.
As we always say on the Wealth Within YouTube Stock Market Show: don't try to catch a falling knife. Wait for price confirmation before acting. Because investing isn't just about making money, it's about protecting it.
What were the best and worst-performing sectors this week?
The best-performing sectors include Materials, up over 3% followed by Healthcare and Real Estate, both up over 2%.
The worst performing sectors include Financials and Information Technology, both down over half a per cent followed by Communication Services, down under half a per cent.
The best performing stocks in the ASX top 100 include Mineral Resources, up over 15 followed by James Hardie, up over 11% and Pilbara Minerals, up over 10%.
The worst-performing stocks include Lynas Rare Earths, down over 6% followed by Xero Limited and Insurance Australia Group, both down over 3%.
What's next for the Australian stock market?
The All-Ordinaries Index booked a solid 1% gain this week, adding to its strong run and inching ever closer to a fresh all-time high. But while momentum looks promising, the market still hasn't broken through and that makes this moment crucial.
Why does it matter? Just look across the Pacific.
The S&P 500 has already smashed through its old record and is now trading more than 1% above it, driven by a relentless surge in mega-cap tech stocks like NVIDIA. Once again, Wall Street sets the pace but this time, we haven't quite caught the wave.
The big reason for the gap is sector weightings. Australia's market is stacked with financials and materials, not sizzling tech giants.
Banks like CBA have done most of the heavy lifting so far, while the miners remain sluggish and unconvinced. A potential rate cut this month could add a bit more fuel but how much of that is already factored into the prices?
There's another factor in play too: the looming July 9 tariff deadline. With little progress made so far, uncertainty is rising and if there's one thing markets hate, it's exactly that.
For now, the trend is still pointing up.
A decisive break to a new high would clear the path to 9000 points, turning 8800 points into the new support base. But if the rally stalls here, the next big support sit back at 8600 and 8400 levels that could be tested fast if sentiment turns.
This is a make-or-break moment for the market. Close to lift-off, but just as close to a reversal if confidence wavers. Stay alert, watch your charts and trade with discipline because the next move could be big.
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