Buy Ruby Tuesday, hold on to Chipotle

Article Excerpt

CHIPOTLE MEXICAN GRILL $531.66 (New York symbol CMG; TSINetwork Rating: Speculative) (303-595-4000; www.chipotle.com; Shares outstanding: 30.9 million; Market cap: $16.7 billion; No dividends paid) is a Denver- based Mexican restaurant chain. It charges slightly higher prices than fast food companies, but it offers better quality food, including naturally raised meat, and superior decor and service. In the three months ended September 30, 2013, Chipotle’s sales gained 18.0%, to $826.9 million from $700.5 million a year earlier. The company’s restaurants attracted more customers during the quarter, which pushed up same-restaurant sales by 4.3%. Chipotle also opened 37 new outlets, and now has a total of 1,539. In 2014, it aims to open 180 to 195 more. Earnings rose 15.3%, to $83.4 million from $72.3 million. Per-share earnings increased 18.4%, to $2.70 from $2.28, on fewer shares outstanding. Chipotle’s profits would have been even higher if not for increased food and ingredient prices. These made up 33.6% of its sales in the…