Hot stock picks: Chipotle reports strong revenue and earnings

Chipotle Mexican Grill, symbol CMG on New York, is a Denver-based Mexican-restaurant chain. In the three months ended March 31, 2011, Chipotle’s revenue rose 24.3% to $509.4 million from $409.7 million a year earlier. The company’s restaurants attracted more customers during the quarter. That pushed up its same-restaurant sales by 12.4%. Chipotle also opened 12 new restaurants. It now has a total of 1,095 locations. Earnings rose 22.5%, to $46.4 million from $37.8 million. Earnings per share rose 24.2%, to $1.49 from $1.20, on fewer shares outstanding. The company holds cash of $282.9 million, or $9.10 a share, and has no debt. The company will open 135 to 145 new restaurants in 2011. That will push up this potential hot stock pick’s sales. However, rising food costs are putting pressure on its profit margins, and it’s uncertain if the company can raise its prices to offset those increases. You can get our clear buy/sell/hold advice on Chipotle and dozens of other hot stock picks with the potential to soar when you subscribe to Stock Pickers Digest. What’s more, you can get the latest issue absolutely free. Click here to learn how.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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