One Million Chicken Burritos

CMG

Company Name:  Chipotle Mexican Grill, Inc Stock Symbol:  CMG Industry:  Restaurants
Percent Appreciation:  1,465% Number of Bags:  14.6 Holding Period:  8.5 Years
Entry Date & Price:  Feb, 2006 @$42.20/share Exit Date & Price: Current ($660.50/share) Original Investment($10,000): $146,500

Company Description:  Chipotle Mexican Grill, Inc., together with its subsidiaries, develops and operates fast-casual and fresh Mexican food restaurants. As of December 31, 2013, it operated approximately 1,600 restaurants; and 6 ShopHouse Southeast Asian Kitchen restaurants. The company was founded in 1993 and is based in Denver, Colorado. The company focuses on trying to find the highest quality ingredients they can to make great tasting food, on building a special people culture that is centered on creating a team of top performers empowered to achieve high standards, on building restaurants that are operationally efficient and aesthetically pleasing, and on doing all of this with increasing awareness and respect for the environment. The company expects to open between 180 to 195 additional stores in 2014.

Quick Trading Overview & Objective: The Company went public in January of 2006 after being spun off from McDonalds. While the company’s IPO price was set at $22 a share, the price immediately doubled at the open, only to trade at $45. The share price continued to appreciate over the next 2 years. Running up 200% before collapsing 70% in the midst of 2008 financial crisis.  Subsequently, the company’s share price went on to appreciate over 1,550% between 2009 bottom and today (as of 7/23/2014 @ $660.50)

We will now go back in time and take an in depth look at the company in order to determine if we could have taken a long position in either 2006 or 2008-2009. More importantly, we will look at Chipotle’s fundamental/trading patterns over the last 8 years to ascertain if we would have been able to maintain our position over such an extended period of time in order to walk away with such massive gains.

FUNDAMENTAL ANALYSIS:

In order to establish a clear picture of what had happened between 2006 and today we must first analyze the fundamental growth of the company over the last 8-10 years.

To Be Continued Tomorrow…….

z32

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