A Growth Story With Years of Value
I'm not usually a fan of stocks that trade for 30x earnings and over 25x free cash flow. Such a scenario creates a huge reliance on growth. But one of the most valuable lessons an investor can learn is to look beyond the first layer of a company -- its valuation metrics -- and see what the story is all about.
I missed Chipotle Mexican Grill (CMG) when it was trading at $150 a share, because of a price-to-earnings ratio of 33 several years back, despite my deep familiarity with the company's story and how rapidly the business was growing. Owing Chipotle several years back at 30x earnings translates into owning the company today at less than 20x earnings, on the basis of that past price. ...646 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.
