Chipotle Mexican Grill (CMG)

(A Top Pick April 15/15. Down 38.43%.) Had owned this for quite a few years. Got stopped out during the E. coli outbreak, but still lost money on the trade.

An opportunity to pick up a pretty good name that has done a sideways move for some time. Millennials (generation Y) are taking to the name. The company is able to price what they want because consumers believe they are getting good value for their money and the quality is very high. Store count is around 1600 in the US, which he thinks is a very low concentration, considering what they have ahead of them. This doesn’t even consider what they are doing internationally.

There is a lot of momentum behind the stock. Trading at 42X forward earnings, which is pretty expensive. Growth rate is 20%, so you are paying 2X PEG ratio.

(A Top Pick Dec 19/12. Up 77.45%.) Seemed like a powerful trend to him, principally driven by their attention to organic high-quality and basically competing with the fast food industry.

High-quality organic food. Every once in a while there is a name that is very, very popular. This is the stock that has the most amount of excitement but also the most amount of volatility. Huge swings. But he feels it is time for some serious business and this is an area he feels investors should take a look at. Have something like 40% margins and 1000 stores. Looking for another $50 from here.

This is not the kind of a stock he looks at because it is a high growth stock and a high multiple stock. Their growth is slowing down. There is a lot of competition in Mexican food. At 30X earnings he is staying away. Doesn’t pay a dividend.

Not really familiar with it but it is higher end. All these companies are going to suffer from higher input costs, affecting margins. Expensive stock in terms of PE and that is why it went down. If it happens again you could see it at $2.50.

Buying a Put when it reaches its high of around $347-$350 with the idea of selling it if it goes down to $320-$310. Good strategy? This is a classic earnings momentum stock. He doesn't like to buy options because by definition you could lose 100% if you're wrong. If you are going to do it, buy a longer dated option (2 month or 3 month), pay the premium and then sell it as it migrates in 1 month.

(Top Pick Nov 4/10, 4.25% yield for 43 days) Short Chipotle / buy December puts. Was a company he did not own but wanted to own.