Warren Buffet invests in Domino’s – should you buy?

What makes Domino's a compelling investment for Warren Buffet's Berkshire Hathaway, and should you buy the UK-listed takeaway pizza chain?

Domino's Pizza Logo
(Image credit: Getty Images)

Warren Buffett is one of the legends of investing. His holding company, Berkshire Hathaway, has outperformed the US stock market by an average of 10% a year over the last eight decades. However, as Buffett himself has pointed out on several occasions, the sheer size of the fund, which recently reached a market value of $1 trillion, means that it is hard for him to find compelling investment opportunities. As a result, he has mainly used the huge amount of cash generated by the investments to buy back Berkshire’s shares. However, in November, his fund took a major stake in Domino’s Pizza. Should you follow suit?

It’s not hard to see why Berkshire likes Domino’s Pizza. The company seems consistent with all elements of Buffett’s “growth at a reasonable price” strategy. Firstly, it has a simple business model that you can understand: making takeaway pizza for both collection and delivery.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri