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Commodities

A tale of (investor) love regained: Papa John's crosses $50, Domino's stock soars

| by S.A. Whitehead
A tale of (investor) love regained: Papa John's crosses $50, Domino's stock soars

Though commodity prices varied widely last week, investors left no question in pizza stock trading that they are fans of what  Papa John's and Domino's are doing lately. The brands showed significant increases in value last week with Papa John's crossing the $50 threshold for the first time in four months and Domino's value skyrocketeingnearly $19 in value over the previous week's close. 

Cheese

In cheese trading, prices were up for both barrels and blocks on the week, with barrels averaging about 5 cents higher at $1.59 and 40-pound blocks coming in about 11 cents higher than last week at $1.69, according to the U.S.D.A. Agricultural Marketing Service. Barrels closed Friday at $1.60, while 40-pound blocks closed at $1.65. 

Strong milk yield is guaranteeing continuous cheese production in all the regions, the service said. However, some California cheese producers had made shifts in the types of cheese produced, as well as holding back the production volumes in some cases. 

Altogether, cheese inventories remain strong, with Midwestern producers reporting they are managing their supplies of the product in a way that will control further growth. There is a seasonal increase in cheese buying in most areas due, in part, to spring holiday demand, with barrel cheese at the center of most of the added interest. Uncertainty in the cheese market remains present and is reflected in the price gap between blocks and barrels.

Wheat

In wheat trading last week, cash bids for wheat were mostly lower, according to the U.S.D.A. Losses in wheat were directly related to flooding, as well as rail transportation issues, which turned out to be less widespread than anticipated. 

Export sales for the week ending March 21 totaled 17.5 million bushels of wheat, with the grain ranging from 61 1/4 cents lower to 1 cent higher. Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 46 1/4cents lower, from $5.60 3/4-$5.75 3/4 per bushel. Kansas City U.S. No. 2 Soft Red winter rail bid was not quoted.  

St. Louis truck U.S. No. 2 Soft Red Winter terminal bid was 2 cents lower to 1 cent higher, from $4.92-$4.95 per bushel.  Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 61 1/4 cents lower at $6.90 per bushel.  Portland U.S. Soft White wheat rail was steady from $5.90-$6.30 per bushel.

Vehicle fuel

Fuel prices are continuing to rise, but the American Automobile Association said that most U.S. residents are strongly considering at least one road trip in the warmer months ahead if prices at the pump remain relatively low overall. It remains to be seen whether that will be the case since the price of a gallon of regular inched up 6 cents to $2.69 a gallon. Indeed, that price is 27 above what we paid just last month and even 3 cents higher than last year at this time. Premium ($3.24) and mid-grade ($2.99) gas prices followed that same trajectory.

But the fluctuations were not nearly as pronounced for diesel and E85 fuels, with a gallon of diesel at $3.03, up just a cent from last week and four cents from last month. Meanwhile, E85 averaged $2.36 today, up 6 cents from a week ago and 20 cents from last month. 

Natural gas

For the seven days that ended March 27, natural gas spot prices fell at most locations as Henry Hub spot prices fell from $2.83 per million British thermal units (MMBtu) to $2.66/MMBtu last Wednesday, according to the U.S. Energy Information Administration. 

At the Nymex, the April 2019 contract expired yesterday at $2.713/MMBtu, down 11 cents/MMBtu over the seven days. The May 2019 contract decreased to $2.719/MMBtu, also down 11 cents/MMBtu over that period. The price of the 12-month strip averaging May 2019 through April 2020 futures contracts declined 7 cents/MMBtu to $2.881/MMBtu.

Net withdrawals from working gas totaled 36 Bcf for the seven days that ended on March 22. Working natural gas stocks are 1,107 Bcf, which is 20 percent lower than the year-ago level and 33 percent lower than the five-year (2014-18) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 64 cents/MMBtu, averaging $6/MMBtu for the seven-day span ending March 27. The price of ethane, propane, butane, and isobutane fell by 12, 6, 5 and 5 percent, respectively. The price of natural gasoline rose by 2 percent.

According to Baker Hughes, for the seven-day period that ended on March 19, the natural gas rig count decreased by one to 192. The number of oil-directed rigs fell by nine to 824. The total rig count decreased by 10, and it now stands at 1,016.

Pizza company stocks

Papa John's and Domino's won the weekly contest for investor love last week. At Papa John's, for example, Nov. 27, 2018, was the last date that its stock hit $50. This time, however, it just kept going up to close Friday at $52.95, sending the chain's refreshed leadership a great a reassuring hug that investors were really liking the direction the brand is headed. That closing price is $3.15 more than the price the brand fetched at the previous week's close.

Meanwhile, Domino's also got a healthy jolt of investor love when that stock closed Friday at $258.10, up $18.85 from the previous week's close and a solid sign of investor faith after several weeks of decline. Meanwhile, Pizza Hut's parent company, Yum Brands also got a nod from its stockholders last week, closing at $99.81 Friday, up 84 cents from the previous week's close. 

Papa Murphy's was the only brand monitored by this site to take a tumble in value last week, closing Friday at $5.24, down 23 cents from the previous week's close. 

Photo: iStock


Topics: Business Strategy and Profitability, Cheese, Delivery, Digital Signage, Dough, Equipment & Supplies, Financial Management, Financial News, Food & Beverage, Insurance / Risk Management, Menu Boards, Pizza Ingredients, Pizza Sauce

Companies: Papa John's, Papa Murphy's, Yum! Brands, Pizza Hut, Domino's



S.A. Whitehead

Award-winning veteran print and broadcast journalist, Shelly Whitehead, has spent most of the last 30 years reporting for TV and newspapers, including the former Kentucky and Cincinnati Post and a number of network news affiliates nationally. She brings her cumulative experience as a multimedia storyteller and video producer to the web-based pages of Pizzamarketplace.com and QSRweb.com after a lifelong “love affair” with reporting the stories behind the businesses that make our world go ‘round. Ms. Whitehead is driven to find and share news of the many professional passions people take to work with them every day in the pizza and quick-service restaurant industry. She is particularly interested in the growing role of sustainable agriculture and nutrition in food service worldwide and is always ready to move on great story ideas and news tips.




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