Good food wrapped in a socially responsible message has created legions of Chipotle fans -- and a superhot business. Acquired by McDonald's in 1998 when there were only 14 Chipotles, the company went public in 2006 with 500 stores and watched its stock rise from $22 to $110 in 18 months. The now-independent outfit is enjoying an 80% revenue run-up over three years, and by year's end, it will have 840 stores and top $1 billion in annual sales.That said, a p/e multiple of nearly 52 is a bit rich for my blood at a price of $110 according to Google Finance. An alternative is their B class shares which have 10x the voting power (a class of shares formerly owned by McDonald's and then spun off), though not cheaper at a price of $97 and p/e multiple of 47. There's gotta be an arbitrage opportunity in there though.
blogging my (mis)adventures in China between and during bouts of jetlag peppered with random thoughts on investing, strategy and development
Saturday, April 12, 2008
Passion first, Profits will follow
Yeah it's probably a bit idealistic of me, but I don't think it makes it any less true. For companies to succeed, they have to be more than what others offer. More importantly, I think passion is infectious. While I think infusing values into your product is sometimes dangerous, it also depends on what those values are. On that meme, consider Chipotle:
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