| Stock (Symbol) | Stock Price | |
Chipotle (CMG) |
$316 |
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| Data is as of | Expected to Report | Sector |
August 16, 2011 |
Oct 19 |
Retail & Restaurant |
| Sharek’s Take | ||
 Chipotle’s numbers are slowing but the stock keeps rising. Profit growth was only 12% last quarter because food costs ate into profit margins. Long term, the company can keep raising prices around 3%. Price increases combined with same-store sales increases of around 10% should offset the negative food costs.CMG stock is high at 46 times earnings. Still, this is one of the best franchises around so its tough to sell the stock. I mean, it keeps rising. Retailers with same-store sales increases of 10% often have stocks that go up. That’s a key indicator for me. |
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| One-Year Chart | ||
 The one-year chart shows quarterly profit growth has slowed from 48% to 23%. and now 12% the last three quarters. The 12% was in all likelihood a one-time thing. Profit growth should accelerate.CMG’s P/E is 46. That’s high. I don’t have a big position in CMG stock right now, but I do wish to keep it in the Growth Portfolio because its such a solid long-term winner. |
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| Earnings Table | ||
 Chipotle’s profits only increased 12% last quarter on a 22% increase in sales. Same-store sales growth was 10% LastQtr, 12% 2QtrsAgo. That’s solid.CMG missed estimates by 3 cents on the higher costs. If the company misses again, we have problems. Annual Profit Estimates rose for 2012 and 2013. This year’s estimates stayed flat. Quarterly estimates look really, really good to me. These numbers increased 2QtrsOut and 3QtrsOut. Thirty-something percent profit growth is expected three and four quarters from now. |
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| Fair Value | ||
 CMG is a little over[riced right now. The stock is even selling near next year’s Fair Value, but I believe estimates will increase and the Fair Value will rise. |
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| Ten-Year Chart | ||
 Chipotle continues to be extended in the ten-year chart. Notice how the stock has had a big decline in the past. I see that happening again. CMG can’t support a 46 P/E with profit growth in the 20s. But since profit growth could be in the 30s, I’ll continue to stick with the stock. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
19 of 19 |
CMG is ranked 19th in the 19 stock Growth Portfolio Power Rankings. Although the stock will drop in my rankings, the Trend arrow is up because the stock is trending up. I don’t see potential in the near-term but wish to hold the stock for the long-term, so I might sell some shares and hold some too. CMG is not in the Aggressive Growth Portfolio. It has little if no upside to Fair Value. |
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Aggressive Growth Portfolio
N/A |
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