Friday, October 26, 2007

Chipotle Mexican Grille(CMG)

I just read this blog entry from Robert Walberg about Chipotle Mexican Grille. It really ignited a firestorm of responses. All Walberg said was that he doesn't understand the hullabaloo about Chipotle and that the stock was very expensive, especially compared to its peers. Now, in the interest of full disclosure, I must admit that I ate one their delicious carnitas burritos for dinner last night. Read the comments that readers wrote. They can't for the life of them understand how he could denigrate the quality of a Chipotle burrito. It's as if you called their child stupid. While I am primarily a value investor, there is a bit of Lynchian populist in me. This sounds like a classic Lynch buy what you know stock, not unlike his calls on Dunkin Donuts and KFC back in the 80s.
I would agree with the readers who said that Walberg hadn't done his research. If he had, he would've found that not only is the food delicious and the service quick, but he would've noticed the hordes of people(lines out the door often) at lunch and dinner time. Also, as several readers pointed out, many of them are teens, who have tons of disposable income to blow on fast food.
I haven't eaten at Moe's, but I've had Qdoba and it's clearly an inferior, Chipotle knockoff.
Right now, Chipotle is one of those rare growth stocks that is worth the price of admission.

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