Friday, October 19, 2007

What makes a stock great?

Today I picked up a little Chipotle (CMG) on the dip. I also had lunch at Chipotle and the place was packed. Chipotle still has a lot of room for growth and could easily add another 20-30 points. Cramer thinks Chipotle will not go much higher, but we will see what the market says. With this momentum it can be hard to stop. Earnings will be released on the 30th.

While I was eating my burrito today I began to compare Chipotle's success with another one of my families favorite restaurants, PF Changs (PFCB). PF Changs owns the highly successful PeiWei chain of restaurants. Why is Chipotle selling for nearly 74 times earnings hitting all time highs, but PFCB is only selling for 21 times earnings hitting all time lows? Two words: Quarterly Growth. CMG's quarterly growth is yoy is 85% while PFCG is only 14.7%. CMG is a growth stock that has huge potential and more importantly momentum.

Disclosure: Long CMG

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