Just listened to @Strawman on the Motley Fool podcast discussing Domino’s Pizza Enterprises (DMP) and its current top level valuation. It prompted me to take another look after several years, when things were a lot different. I’ll be delving into it this week. Some initial thoughts below.

It reminds me a bit of something I once heard in sports betting. There was a professional gambler who made a lot of money betting on former champions when they were down during a match, with a belief that the market often miss prices champions when they're down. Maybe that applies here. Maybe not. But worth a closer look.

When I last looked at this several years ago, the management team seemed to have the golden touch with overseas expansion, and the Australian business was going from strength to strength. They were growing earnings strongly every year and appeared to have a long growth runway ahead.

I gave them the benefit of the doubt at the time, based on their short term success. But in hindsight, an Australian licensee of an American pizza brand trying to take pizza to Asia and Europe was kind of strange. Hindsight is a great thing!

Just some initial thoughts on how I plan to approach Domino’s valuation:

• The different trajectory of each regional business probably calls for a sum of the parts approach rather than looking at it as a blended whole

• What I’m understanding at the moment is that they’ve got a successful Australian business that could potentially be valued using more straight forward methods, and who knows, may alone be worth a fair portion of the current market cap and a struggling group of international businesses where the value is much harder to pin down

• I wonder if those offshore operations should be treated more like options; potentially valuable, but also at risk of being worth little or even costing money to unwind

• Another thing that needs to be considered is their franchise model. Most of the stores are not company owned, which changes the risk profile, and puts an added level of risk on the debt. Should a franchisor, already operating with high leverage from the business model itself, really be carrying this much debt?

• How much is the whole model at risk if Domino’s can’t ensure their franchisees are making money? That feels like the real point of fragility.. RFG's story comes to mind!

I welcome any input.. Could just be another stone to turn over but the natural contrarian in me is eager to take a look.