Author Topic: CMG - Chipotle  (Read 114369 times)

TorontoRaptorsFan

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CMG - Chipotle
« on: June 17, 2015, 07:36:41 AM »
CMG expansion with Shophouse and Pizzeria Locale continues.

Pizzeria Locale adding locations to Cincinnati and Kansas City.
I love how methodical they've been with teaming up with famed restaurateurs Bobby Stuckey and Lachlan Mackinnon-Patterson
www.pizzerialocale.com

Good article for anyone interested:

http://www.eater.com/2014/3/20/6260963/how-chipotle-and-pizzeria-locale-pulled-off-their-secret-partnership

It's crazy to think about Chipotle's potential. They've barely expanded into International markets. And Shophouse and Pizzeria Locale expansion has only begun.
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JayGatsby

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Re: CMG - Chipotle
« Reply #1 on: June 18, 2015, 09:11:21 PM »
I'd be surprised if they didn't more than double the number or Chipotles (ex new concepts) in North America alone. This is the only true growth businesses I own but I think the valuation is actually pretty reasonable, which is strange to say at a PE of 40. They've created a nice niche for themselves where they're uniquely positioned in an otherwise crowded market. Trader Joe's I'd put in a similar category, but privately owned, sadly.

jawn619

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Re: CMG - Chipotle
« Reply #2 on: June 18, 2015, 11:34:04 PM »
copycats don't scare you? dos toros, other restaurants with chipotle like models, not to mention regular restaurants?

JayGatsby

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Re: CMG - Chipotle
« Reply #3 on: June 19, 2015, 07:35:15 AM »
I think a core part of their value proposition is the "food with integrity". There's a lot of places that sell burritos, but generally the quality isn't as good. Five years ago there was Qdoba, Baja Fresh, Moe's, etc.  The trajectories of those haven't been nearly the same as Chipotle. I don't know of another chain that has the same quality of food for $7.

Not a huge position for me but I think it has a lot of room to grow. Without even comparing profitability per restaurant:
Chipotle: 1,800
McD's: 36,258
BK/Tim Hortons: 19,000
Taco Bell/Pizza Hut/KFC: 41,000

So if they double in size they'd still only be 1/10th the footprint of McD, and I'd argue McD is in a much more crowded segment of the market.

TorontoRaptorsFan

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Re: CMG - Chipotle
« Reply #4 on: July 22, 2015, 10:56:50 AM »
What a great day to be a shareholder!

I LOVE CHIPOTLE!

http://www.forbes.com/sites/briansolomon/2015/07/22/6-reasons-chipotle-bounced-back-to-a-new-all-time-high-with-carnitas/

I love the fact that expansion continues. Now they're up to 1,878 locations. It looks like International expansion is continuing. And even better news is that they're going to expand even faster in Canada.

Another $100 million in share buybacks.

Keep in mind they still have oodles of expansion opportunities still with the Chipotle brand and they're just beginning to rollout more Shophouse and Pizzeria Locale locations.

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CorpRaider

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Re: CMG - Chipotle
« Reply #5 on: July 22, 2015, 05:32:22 PM »
Don't love it.  The stock doesn't know you own it.   ;D

ScottHall

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Re: CMG - Chipotle
« Reply #6 on: July 22, 2015, 05:51:33 PM »
There's nothing wrong with loving a business for the economics it generates. CMG is a hell of a compounder.
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valueinvestor82

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Re: CMG - Chipotle
« Reply #7 on: July 22, 2015, 07:53:28 PM »
Is this still a value investing board? Yikes!

innerscorecard

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Re: CMG - Chipotle
« Reply #8 on: July 22, 2015, 07:56:30 PM »
Is this still a value investing board? Yikes!

This is 2015. Value and momentum are joined at the hip! ;)
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ScottHall

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Re: CMG - Chipotle
« Reply #9 on: July 22, 2015, 08:40:32 PM »
Is this still a value investing board? Yikes!

I don't own shares, but have you ever done the numbers on the sort of returns on its capital Chipotle earns from opening a new restaurant? When you run the numbers, it's good enough that the high P/E looks like it could be perfectly reasonable.
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