The initial reaction is rarely the right one

Hyperion Asset Management has been long-term supporters of Domino’s Pizza. Tim Samway, Managing Director, admits that today's Domino's result missed on a few areas, but that he was generally 'not that unhappy.'

"There are a few misses and our numbers will come down in the short-term, but it feels like an overreaction. The market has taken a more negative view, but the negatives aren't that bad."

He says Hyperion remains a happy long-term shareholder and pointed out that the Company has announced a share buyback of up to $300 million over 12 months, which he says is a strong message from management.

Domino’s CEO Don Meij said, “The buy-back reflects the strength of our cash flows and balance sheet, as well as our confidence in our future outlook. It provides an avenue to return capital to shareholders and take steps to increase the efficiency of our balance sheet.”

At the time of writing Domino’s shares were down 15%. Samway says the report was heavy on detail and would take some days to fully digest.

"Reporting season tends to be pretty volatile. Rarely is the reaction on day 1 the right reaction in these types of stocks"