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$69.97 1.27 (1.85%)
9/5/2008 4:01 PM

Chipotle Mexican Grill, Inc. (CMG)

CAPS Rating:
***

The Company develops and operates fast casual, fresh Mexican food restaurants serving burritos, tacos, bowls and salads.

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Avatar NetscribeRstrnts (< 20) Submitted: 1/03/07 7:27 AM : Outperform Start Price: $56.90 CMG Score: 35.50

BIG SPICE, SMALL PRICE the line goes very well with the Chipotle Mexican Grill. The company engages in the development and operation of fast-casual, Mexican food restaurants in the United States. Being the largest fast-casual restaurant concept in the US, Chipotle Mexican Grill operates a chain of 547 restaurants in 25 states including 539 company-operated and 8 franchised locations.

Chipotle recently became completely independent from McDonald’s, which held around 83% of voting interest and 51% of economic interest in Chipotle, following MCD’s tax-free exchange of Chipotle class B common stock for MCD common stock. The exchange was significantly over subscribed showing that there was a great interest and support for Chipotle among McDonald’s shareholders.

The company has been reporting positive growth trends since the past several years and 2006 is going to be its ninth consecutive year of positive same store sales. The company has reported same store sales growth of 11.6% in the recent quarter, which is the highest recorded by any company in the segment in which it operates. The company has been showing a steady growth in the free cash flows and it is continuously working towards maximizing its efficiency in all aspects of its business by focusing on improving internal processes and financial controls. These improvements would further enhance its already solid economic structure and growth pattern.

Chipotle has differentiated itself from its peers by committing to freshness and quality, offering good value for customer’s money, a focused menu and speed of service. Going forward, it is expected that Chipotle will maintain its dominant competitive position by leveraging its brand awareness and proper execution of its plans, which will fuel additional growth in the stock.

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Avatar NetscribeRstrnts (< 20) Submitted: 4/16/07 7:56 AM

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After Chipotle’s spin off from McDonald's in one of the hottest initial public offerings of 2006, the company’s shares had more than doubled to $44 on their first day of trading in January 2006 and since then are up about 40%. Chipotle Mexican Grill, Inc. operates fast casual, fresh Mexican food restaurants serving burritos, tacos, bowls and salads. The shares are still looking strong as the revenues are expected to increase with the company’s plan to open 95 to 105 new restaurants in 2007.

For the fiscal year ended 31 December 2006, Chipotle Mexican Grill, Inc.'s revenues increased by an impressive 31% to $822.9 mn. Revenues reflect increase in comparable restaurant sales due to rise in number of transactions and higher franchise royalties & fees. This shows that the company’s approach of food with integrity, which is based on the antithesis to fast food industry, is gaining popularity. The company’s approach is to use meat from animals raised on a vegetarian diet and charging higher prices based on the cost of doing business with farmers who raise their livestock without antibiotics or hormones.

Chipotle’s business model is one that is expected to continuously drive success and build value for its shareholders. It is expected that the extraordinarily good same store sales will offset the cost headwinds and will prove to be catalyst to drive the growth of the company.

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