The Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price rocketed 9.0% to a new, 52-week high of $68.32 last week. This was before falling back slightly in morning trade today to $67.99 at the time of writing. 

Investors have been bullish on the Aussie food group in recent weeks but is there still good value in Domino’s shares?

Why the Domino’s Pizza share price hit a 52-week high

You’d have to be pretty happy as a long-term investor in this Aussie food group. The Domino’s Pizza share price has climbed 29.9% in 2020, 73.8% in the last 12 months and 88.0% over the last 5 years.

Given we’ve just seen a steep bear market followed by a slingshot recovery, those who bought and held Domino’s shares would be sitting on a tidy profit.

I think a strong delivery model has been a big factor in Domino’s being able to achieve a new, 52-week high. Even during the height of coronavirus restrictions, Domino’s was still able to maintain its operations through its delivery and takeaway options.

I feel communication has also been key, with Domino’s providing regular updates throughout COVID-19. The company has restaurants across Australia, New Zealand, Asia and Europe which were all subject to different trading restrictions.

In its last announcement on 24 April, Domino’s advised that all stores “continue to adapt to changes in customer behaviour, community expectations, various support measures and local trading conditions”. 

I think the Domino’s Pizza share price has benefitted greatly from consistent, same-store Australian sales over recent months. This has offset lower revenues from France and New Zealand where stores were forced to close temporarily.

There’s also the company’s strong balance sheet that is likely to be playing a part in its recent share price growth. Domino’s has no short-term debt, with its existing facilities due for renewal in the first half of FY 2023.

This leaves the company in an enviable position to remain focused on its strategy during these turbulent times.

I believe another strong factor behind the strong performance of the Domino’s Pizza share price has been the company reaffirming its medium-term outlook for new store openings, same-store sales and net capex.

Is Domino’s good value at $68?

The Domino’s share price closed at a new, 52-week high of $68.32 per share on Friday afternoon and is now trading at $67.99. 

Many investors are reluctant to buy companies at 52-week highs which is understandable. However, I think this reflects a short-term investing mindset.

If you really want to invest in Domino’s Pizza for the long term, then today’s share price or next week’s shouldn’t matter.

Instead, I think it’s preferable to consider the opportunities for the company’s expansion over the coming decades. Personally, I’m not bullish enough to be buying Domino’s shares at their current valuation.

Having said that, I don’t think a 52-week high should necessarily deter you from buying if you’re holding for the long term.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is the Domino’s Pizza share price a good buy at $68? appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) has returned to its recent strong form, gaining 1.6% last week. Early sales data for May boosted the market on Friday, alongside positive sales results from retailers. According to the ABS, retail sales rose 16.3% in May, with large rises in spending on clothing, footwear, personal accessories, cafes and restaurants. 

The technology sector also contributed to gains with the All Technology Index (ASX: XTX) up 1.75%. The resources sector lost ground during the week, with gold miners suffering as investors adjusted risk appetites.

Here we take a look at the 5 ASX shares that sustained the biggest share price losses last week.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price fell 14.5% last week to close the week at 26.5 cents. The lithium miner was removed from the S&P/ASX 200 late the previous week as part of S&P’s quarterly rebalance. 

Lithium prices have continued their downward trend, hitting a fresh low in June as Chinese demand remained subdued despite domestic businesses returning to work. Lithium is an integral component of batteries for electric vehicles. Demand for lithium is expected to pick-up in the second half of 2020 as increased adoption of electric vehicles drives increased demand for battery components. 

Pilbara Minerals owns the Pilangoora Lithium-Tantalum project, which has a 23 year mine life. A multi-stage mine expansion is planned with stage 1 currently in production. The stage 2 phased expansion study is nearing completion. 

The company is currently moderating production in response to soft market conditions. An extension of China’s electric vehicle subsidy program is expected to boost the lithium-ion battery sector and improve market conditions in the medium to long term. 

Mayne Pharma Group Ltd (ASX: MYX)

The Mayne Pharma Group share price dropped 13.6% last week with shares finishing the week at 35 cents. This is the second week in a row that Mayne Pharma has been amongst the worst performers on the ASX. There was no news out of the pharmaceutical company last week to prompt the drop in price, however Mayne Pharma was removed from the ASX 200 late the previous week as part of the quarterly rebalance.

The pharmaceutical company had a disappointing first half performance which saw revenues decline 17%. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 47% to $34.6 million. A net loss after tax of $17.5 million was reported driven by lower earnings and restructuring costs. 

Mayne Pharma has faced strong competition on its key generic products. The US generic market has been challenging with aggressive contracting behaviours driving price deflation. The company has been focused on reducing its cost base and rationalising its generic portfolio. Annualised savings of $20 million have so far been recorded.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue Metals share price tumbled 6.9% last week to close the week at $13.79. Despite last week’s drop, the Fortescue Metals share price is up 93% from its March low. Last week Fortescue announced an emissions reduction goal to reach zero net operational emissions by 2040. This goal includes a reduction in emissions in existing operations by 26% from 2020 levels by 2030. 

The miner is a core supplier of iron ore to China, where steel production increased 1.3% year on year in the 4 months to 30 April 2020. Fortescue has reported strong demand for its products with steel inventories drawn down as economic activity recovers. The iron ore price has remained fairly resilient throughout the pandemic. 

As at 31 December 2019, Fortescue generated net profit after tax of (NPAT) of US$17 billion. The company used US$9 billion of capital for debt repayment and US$6 billion for dividends. Fortescue is targeting a gearing ratio of 30% to 40% of gross debt. Since FY16, the company has reduced its gross gearing ratio from 45% to 24%. 

Sydney Airport Holdings Pty Ltd (ASX: SYD)

The Sydney Airport share price dropped 6.3% last week to finish the week at $6.05. The price drop was at least partially prompted by the May air traffic performance numbers, which were released last Friday. Total passenger traffic in May was 92,000 passengers, down 97.4% on the prior corresponding period. 

Some 29,000 international passengers passed through Sydney Airport in May, down 97.7%. Domestic passengers totalled 62,000, a decrease of 97.2% on the prior corresponding period. The decrease in passenger traffic is expected to persist until government travel restrictions are eased. 

In April, Sydney Airport secured $850 million of additional bank debt facilities and announced no half year distribution would be paid. Sydney Airport has also implemented a range of cost reduction activities and is targeting a 35% reduction in operating costs for the 12 months from 1 April 2020. 

Star Entertainment Group Ltd (ASX: SGR)

The Star Entertainment Group share price fell 6.1% last week to close the week at 6.1%. The was no news out of Star Entertainment last week to prompt the fall, however fears around a second wave of COVID-19 infections may have spooked investors. 

Earlier this month, Star Entertainment announced the reopening of Star Sydney on a limited basis. Private gaming rooms have been reopened in addition to a number of food and beverage venues. The reopening is limited to up to 500 loyalty club members on an invitation only basis. Additional visitation is permitted across other areas including hotels and fine dining restaurants with up to 50 seated customers. 

Group operating expenses are expected to be around $20 million for the month of June. This is above the $10 million advised while restrictions remain in place. The incremental increase in costs is largely comprised of employee costs related to the staged reopening of Sydney and Queensland venues. 

Although venues are reopening, restrictions mean that business volumes will be significantly below normal levels. Star Entertainment is focused on conservatively managing the business as it prepares for a return to more normal conditions as restrictions unwind.

More reading

• A $73m boost sends the Austal share price to the top of the ASX 200 today
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• Is the a2 Milk share price a buy after falling nearly 5% on Friday?
• The NAB share price has fallen 24%. Should you buy?

Motley Fool contributor Kate O’Brien owns shares of Mayne Pharma Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post These 5 ASX shares saw the biggest losses last week appeared first on Motley Fool Australia.

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The Austal Limited (ASX: ASB) share price surged after the US government agreed to pump US$50 million ($73 million) into the company’s US shipyard.

The Austal share price jumped 7.7% to $3.62 in morning trade and is the best performer on the S&P/ASX 200 Index (Index:^AXJO).

Gold miners are in distant second and third places. The Saracen Mineral Holdings Limited (ASX: SAR) share price jumped 4.9% to $4.95 and Northern Star Resources Ltd (ASX: NST) added 4.5% to $13.62.

ASX COVID-19 winners

While precious metals are in favour in this risk-off environment, Austal is the real standout as it is also a big COVID-19 beneficiary.

The US Department of Defence (DoD) signed a Defense Production Act Title III Agreement with Austal USA. The agreement is part of the US government’s national response to COVID-19 to maintain, protect and expand critical domestic shipbuilding and maintenance capacity.

Austal will likely match the DoD’s investment to take the total capex budget to around US$100 million.

Austal catches coronavirus stimulus

While details on how the cash will be spent is yet to be worked out with the DoD, management intends to “commence investment in the development of additional capacity for steel naval vessel construction”.

The US government funding is also aimed at protecting and creating jobs in Mobile, Alabama, where the local economy is hit hard by the coronavirus pandemic.

Austal is promising to release more details in the coming months, but it’s easy to see why investors are excited – and it’s not only because of the cash amount.

More than money

The large financial commitment by the US government shows how important Austal is to the US Navy. This is an important signal after Austal missed out on the Guided-Missile Frigates FFG(X) contract, which was awarded to a competitor.

Austal is one of my top picks in the industrials space as its earnings are more resilient to the global COVID-19 recession.

Another ASX stock to for your watchlist

Interestingly, Austal isn’t the only ASX stock that is likely to benefit from US government funding. I believe that rare earths miner Lynas Corporation Ltd (ASX: LYC) is in the box seat to get a cash injection from Uncle Sam.

There’s speculation that Lynas might be overlooked due to intense lobbying by Lynas’ US competitors for its government to back local companies.

But Lynas is the only non-Chinese miner that have rare-earths operations of any significance, and I think it will get a piece of the action.

The US is trying desperately to develop its own supply of rare earths to ease its dependence on China.

Rare earths are used in a range of critical equipment, including weapons and electronics.

More reading

• These 5 ASX shares saw the biggest losses last week
• These 5 ASX shares were last week’s top performers
• Is there a better buy than JB Hi-Fi shares today?
• Is the a2 Milk share price a buy after falling nearly 5% on Friday?
• The NAB share price has fallen 24%. Should you buy?

Brendon Lau owns shares of Austal Limited and Lynas Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post A $73m boost sends the Austal share price to the top of the ASX 200 today appeared first on Motley Fool Australia.

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