Greg Abel has the unenviable task of succeeding legendary investor Warren Buffett as CEO of Berkshire Hathaway (BRKA -2.06%) (BRKB -2.06%). Still, it's only natural that Abel will put his own stamp on the company he leads.
That includes making changes to the portfolio. Since becoming CEO at the start of the year, company filings show that Abel has whittled down Berkshire Hathaway's equity portfolio. He's also added and subtracted positions. This includes selling Domino's Pizza (DPZ -0.49%) shares this year.
However, here's why investors shouldn't follow Berkshire Hathaway's lead on this stock. In fact, it's a good time to buy shares.
Image source: Getty Images.
Berkshire Hathaway's previous holding
Before examining Domino's Pizza, it's instructive to see when Berkshire Hathaway built its position. The firm bought Domino's Pizza shares during the third quarter of 2024. During that period, it purchased nearly 1.3 million shares, valued at nearly $550 million as of Sept. 30, 2024.
Showing confidence in the company, Berkshire Hathaway bought more shares over time. At the end of 2025, the company owned over 3.3 million shares, which were worth nearly $1.4 billion. However, Abel acted decisively early in his tenure as CEO. Under Abel's stewardship, Berkshire Hathaway sold all of its Domino's Pizza shares during the first quarter.
Long-term fundamentals remain intact
Still, the company's fundamentals suggest Berkshire Hathaway made the wrong decision. Domino's, the largest pizza company in the world, believes in providing quality food at reasonable prices. Its delivery and takeout business seeks to offer customers convenience.
That business philosophy led to a successful long-term track record. However, the company's recent sales have been tepid. But with consumers' wallets squeezed by higher prices for basic items like gas, it's not surprising that they've cut back on eating out. Domino's second-quarter same-store sales (comps) at its U.S. locations grew a scant 0.1%. And they fell 0.1% at international restaurants.
Investors can take comfort in Domino's growing market share, which will put the company in a stronger competitive position when economic conditions ease. For instance, the company expanded its share of the quick-service pizza market from 22.5% in 2024 to 23.3% last year.
Although founded in 1960 and already the world's largest pizza company, management still sees expansion opportunities. Over the last four quarters, Domino's added 995 restaurants, including 209 in the second quarter. Most of these have been outside the U.S., with 825 new international locations over the last year. It ended the period with 22,531 worldwide restaurants.
Domino's franchise model (99% of restaurants) means it can expand without expending a lot of capital. Franchisees make initial investments to build restaurants. They also pay an up-front fee and an ongoing royalty to Domino's.
NASDAQ: DPZ
Key Data Points
Stock valuation presents a buying opportunity
Investors haven't been pleased with recent results. They've sent the share price down 25.2% through Sept. 11 this year. Meanwhile, the S&P 500 gained 11.9%.
However, this has created a better valuation that long-term investors should view as a buying opportunity. Since the start of the year, the stock's price-to-earnings (P/E) ratio has dropped from 24 to 18. The shares trade at a much lower multiple than the S&P 500's P/E ratio of 26. Domino's stock also looks attractive compared to its historical valuation. The shares have a 10-year median P/E ratio of 31.
Granted, it's not easy to go against the market and, given its investment track record, Berkshire Hathaway. But with Domino's gaining market share during a challenging period, an expansion opportunity ahead, and an attractive valuation, long-term investors should view the stock as a major buying opportunity.
