Saturday, December 1, 2012

"Get ready to take some small bites of Chipotle Mexican Grill (symbol CMG) with some pinto beans (with a little bacon), and guacamole. Buy 5 and 10 shares at a time and average in"

Dow Jones Industrial Average 13025.58 (UP) Week ending 11-30-2012

Good evening. I'm Freewilly and this is "Freewilly's Stockpicker Blog" , Welcome back. "Just remember, It's just your money. It's not your life. The figures on a broker's report mean little compared to that. The people who loved you a week ago still love you today." 

Sound familiar? It's an introduction from Louis Rukeyser's "Wall Street Week". I probably should have saved it for a January 2013 blog for when we dive over the Fiscal Cliff like Bill Murray and that groundhog in the movie, or Thelma and Louise. The compromise offered so far by the administration has been laughable and has gone in the opposite direction from compromise. The good news is that it is propelling a lot of company declared December special dividends which can be seen at this link put together by 24/7 Wall Street : "Special December dividends"  . You might want to grab one of these to get the dividend.

But, on we go to the current topic. Chipotle Mexican Grill Inc. (Symbol CMG, $263.78) is a dynamic growth company that only has 31.5 Million shares outstanding.  It has a Return on Equity of 23.70% and a PEG ratio of 1.21. The stock is actually down 18 or 19% this year so it has consolidated its gains and gives you a good entry point to start accumulating it.  I suggest buying it at 5 to 10 shares at a time to build a position over time.

5 year sales growth here has been 21.80% and the 5 year earnings growth has been a rollicking 43.55%. With 2.3 Billion in sales this company is a Mid-Cap, just in it's infancy stage. The three year Total Return on the stock has been 211%, so you had to have a little cooling off phase after such a big run up. 

Every time I go by one of their restaurants the lines are packed.
They seem to have three things going for them. The food is very good. The food is very affordable, with an average price at $6.84. Third, they move people through the line very quickly with an assembly line method. (Henry Ford would have liked it).  

..... and they have fun there!  I can see this stock being a 5 or 6 bagger from here. If Peter Lynch was still around running Magellan, it would be in his portfolio for sure.

So, start grabbing up some CMG shares in small bites, and grab your special dividends and your parachute and prepare to be ready to go over the cliff. It could be 8 weeks before you land on the ground. That is not me skydiving!

and so December trading begins ......       Freewilly    .... Catch you next week.

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