Chipotle: Stock might be pricey, but

with these results, no one cares

from Yahoo
A Chipotle Restaurant sign is shown outside a Chipotle Restaurant in San Diego ,California

View photo

A Chipotle Restaurant sign is shown outside a Chipotle Restaurant in San Diego, California in this file photo taken September 24, 2013. Chipotle Mexican Grill Inc on Thursday reported a bigger-than-expected increase in sales at established restaurants and a nearly 30 percent rise in earnings, sending shares up more than 10 percent in extended trading. REUTERS/Mike Blake/Files (UNITED STATES – Tags: BUSINESS)

Chipotle (CMG) investors have gotten used to otherworldly performances from the Denver-based burrito seller, and in a few days they’ll find out if they get to gloat once again — or if they instead get to deal with a rare misstep.

The latter would be stunning, almost certainly leading to a sizable drawdown in the shares, but counting on that to happen might best be left for only the most dedicated contrarians. After the close of trading on Tuesday, fourth-quarter earnings are due, and this time, analysts are planning on a profit of $3.79 a share, up from $2.53 in the same quarter last year. Revenue should advance to $1.08 billion, compared with $844.1 million previously. Same-store sales, which have been absurdly strong in recent quarters, are estimated to climb 16.3% after a 9.3% increase a year ago.

If Wall Street proves to be right, the financials will, again, further solidify Chipotle as the leader of the fast-casual restaurants. At the consensus forecast, earnings per share would be up 49.8% from the fourth quarter last year, while revenue would rise 27.4%. Those readings would surpass both the average estimated growth and the average actual growth over all quarters for the past four years. In that time, analysts have projected year-over-year earnings growth of 22% and revenue growth of 20%. Chipotle has regularly done even better, with an average 26% gain for earnings and 22% on sales. This quarter clearly would outpace that.

Chipotle has seen these types of results because it’s found favor with diners almost everywhere it goes. Its run to 1,700 stores, a total that includes ShopHouse Southeast Asian Kitchen and an investment in the owner of Pizzeria Locale, has been accompanied by a stock that’s been outstanding. Shares are up 11 times from the end of 2008, when they were at $62, to the end of 2014, when they closed at $684. And that even includes a down year in 2012.

So far in 2015, the stock’s up another 4.8%, including setting an all-time high at $727.97 on Jan. 8.

Beyond the numbers, Chipotle’s management presumably will offer further detail on operational matters, in particular how sales are being affected by the removal of carnitas from some of its stores — a move taken because a supplier wasn’t meeting Chipotle’s pork-sourcing standards — and the impact of the late January winter storm in the Northeast. The latter is an issue most every retailer operating in the region will have to address, including chain restaurants.

At some point Chipotle has to slow, as businesses do. But betting against the company’s approach, and its stock, has been a terrible idea. Short sellers aren’t especially interested in the risk, even as Chipotle has risen to be one of the largest U.S. restaurants, with a $22 billion market cap. That’s an impressive achievement for a restaurant chain that sells Tex-Mex-style foods and competes in a crowded market. These days, short interest is right around where it was last year, now at 3.9% of the float.


Those who do like to go against the prevailing view will appreciate that several standard valuation measures on the stock are above their five-year averages. The price-to-earnings ratio on the last 12 months’ earnings is 56 vs. a 47.1 average, whereas the forward multiple is 40.1, above the 35.5 average. Analysts’ consensus price goal is now $745.80, compared with about $712 at the current trading level, and around half of the stock’s followers have a buy rating, with the other half a hold. There are no outright sells.

It’s incredibly difficult to argue against the idea that Chipotle is winning, with the customers who are happy to pay higher prices and with investors who are, too. It’s winning with the better-for-you food movement among restaurants that are trying to provide alternatives to large, entrenched brands like Burger King and McDonald’s (MCD) (the Golden Arches used to own a majority holding in Chipotle). The public has gotten on board with its burrito bowls and chips, with management all the time telling the story of more natural ingredients and concern for the environment. It’s done so well over its two-decade history that traders and the media are on a constant search for the restaurant that can be “the next Chipotle.”

The only surprise with next week’s quarterly earnings will be if it doesn’t keep winning.


See more on Franchise restaurants at

Why Burger King / Tim Hortons Will Work – Tax Magic

reprinted from

Corporate Income Tax Rates Around The World : U.S. Third Highest
Posted on August 30, 2014 by jackbassteam

The United States Has the Third Highest Corporate Tax Rate among 163 Nations

( – which is why our Tax Minimization System is so effective – contact information at the end of this discussion. However , if you cannot understand why paying 3 cants of every earned dollar is better than 35 % read no farther)

The top marginal corporate tax rate among the 163 countries surveyed was the United Arab Emirates, which has a top rate of 55 percent . This is followed by the African nation of Chad (40 percent). The United States, with a combined top marginal tax rate of 39.1 percent (consisting of the federal tax rate of 35 percent plus the average tax rate among the states), has the third highest corporate income tax rate in the world. In contrast, the average across all 163 countries and tax jurisdictions is 22.6, or 30.6 percent weighted by gross domestic product.

Every region in the world except for Oceania is represented in the top twenty countries. Six of the top twenty countries are in Africa and five are in Asia. The nine remaining countries are in South and North America.

Other large nations in the top twenty countries besides the United States are Japan (37 percent), France (34.4 percent), Brazil (34 percent), Pakistan (34 percent), and India (34 percent)

The key findings of the latest summary of worldwide corporate tax data published by The Tax Foundation are:

The United States has the third highest general top marginal corporate income tax rate in the world at 39.1 percent, exceeded only by Chad and the United Arab Emirates.
The worldwide average top corporate income tax rate is 22.6 percent (30.6 percent weighted by GDP).
By region, Europe has the lowest average corporate tax rate at 18.6 percent (26.3 percent weighted by GDP); Africa has the highest average tax rate at 29.1 percent.
Larger, more industrialized countries tend to have higher corporate income tax rates than developing countries.
The worldwide (simple) average top corporate tax rate has declined over the past decade from 29.5 percent to 22.6 percent.
Every region in the world has seen a decline in their average corporate tax rate in the past decade

You and Your Company Can Achieve Gold Standard Tax Reduction With Our System – if you act . Common Sense Demands : Move Your Money to A Low Tax Jurisdiction.

Effective and efficient are the hallmarks of money management – are they they hallmarks of your tax planning ?Personal concerns over privacy are as important and the jurisdictions we use value that secrecy to the extent it is part of their banking and tax codes.

Yes we have to charge for putting all this in place – because unlike your fairy godmother our creditors demand payment as bills become due . Don’t begrudge the workman his due.

If you want total control you must open both a corporation and a bank account in a low tax jurisdiction ( usually referred to as a tax haven) – and you will have to pay to get that done by a reliable party PERIOD – is that clear enough ? Developing a tax strategy is not the same as walking into the mall and opening a checking account.

Tax Haven Savings – Contact Information

Are you finally taking the step to tax freedom by incorporation and banking in a low tax jurisdiction? and if not why not ? Information must proceed action and that is why we offer a no cost / no obligation inquiry service.

Email info@ or
Call Jack direct at 604-858-3202 – Pacific Time 9:00 – 5;00 Monday to Friday

The main intention of our website is to provide objective and independent information that will help the potential investor to make his own decisions in an informed manner. To this effect we try to explain in a simple language the different processes and the most important figures involved in offshore business and to show the different alternatives that exist, evaluating their pros and cons.
On the other hand we intend – in terms of offshore finance, bringing these products to the average citizen.

Do something to help yourself – contact Jack A. Bass now !

Investing In A New Franchise / Concept

My client owns a successful restaurant . He does not have the funds to develop a franchise system so I proposed I would invest my fees in return for a one-third equity in the franchise system ( not including any ownership in his restaurant ). He agreed and I began my work.
Within two weeks of our first meeting he withdrew from our agreement. He insists on keeping 100 % of the equity . The result is he has 100 % of what I call ” The Big Shinny idea” – but nothing more of what could have been be a franchise / chain of successful businesses.

I believe that the reason small business remains small is that type of small thinking. What do you think?

Papa Murphy’s The Rising Dough

Papa Murphy’s (FRSH : NASDAQ : US$9.35), Net Change: 0.30, % Change: 3.31%, Volume: 326,661
Vancouver, Washington-based Papa Murphy’s announced financial results for its quarter ended March 31, 2014
The company earned total revenues of $25.1 million, up $5.5 million Y/Y and the results excludes the $1.8 million of revenues in Q1/14 related to the re-sale of point of sale licenses to franchisees at cost.

Domestic comparable store sales increased 3.3%, including an increase of 7.1% for domestic company-owned stores and 3.1% for domestic franchise stores.
Papa Murphy’s adjusted EBITDA increased 33.7% to 7.5 million for the quarter. 21 new Papa Murphy’s stores were opened system-wide, including 19 new domestic franchises, with 2014 outlook expects 105 new domestic franchises to open.

Ken Calwell, President and CEO, stated, “We are pleased to begin fiscal 2014 with impressive increases in revenue and pro forma profitability. Our success continues to be driven by the collective hard work of our team and franchisees, as we continue to help busy parents and families solve the dinnertime dilemma of providing their family with a high-quality, home-cooked meal, at a great value.”

On May 7 of this year, the company successfully completed an IPO of 5,833,333 shares at $11 per share in which the proceeds to Papa Murphy’s, after deducting underwriter discounts, commissions, and estimated offering expenses, were approximately $55.8 million.

The net proceeds from the IPO were used to pay down $55.5 million of existing debt. Calwell
added that the company is excited about the opportunities head of them and believes that they will continue to drive same store sales growth and improve system-wide profitability by executing their initiatives.

An Open Letter To Burger King

I am a business consultant and herewith offer a few observations at no cost !

I used to have my morning coffee at your rival McDonald’s. I received a coupon promotion for coffee – and for 25 cents I thought I’d give your local restaurant a try. First visit – last week – I find the restaurant not open until 8:00 a.m. – so anyone out for coffee won’t head to BK. One of the great lessons a restaurant learns is that the bank charges interest 24 hours a day .

Second visit 8:05 this week – just me and the staff despite the coffee at a fraction of what others charge . The colors of the restaurant are dull – blue / grey. What you learn is that restaurant patrons do not want to be all alone in a large building.

Why aren’t you advertising to the seniors that fill McDonald’s in the early morning ?People attract people – you are not gaining any ” community ” of early morning patrons or folks grabbing something before their commute / office.

Third visit – the aft ernoon. Much busier – but not to your main rival’s level AND importantly – with only two people asking for coffee : 1) the staff relied on remembering our orders – no display terminal 2) my order – coffee with one cream wrong – and had to be redone 3) the staff calls out orders to each other because there was no display screen for orders

This is not a staff problem – the people were friendly and doing their best. You as an organization are failing your clients , staff and shareholders. Great potential – but they used to say the same about me.   Jack A. Bass

My Favorite Stocks to Watch in the Expanding Coffee Market

By George Leong, B.Comm. for Profit Confidential

I love the smell of coffee brewing in the morning—and in the afternoon and evening. As you can tell, I do enjoy my coffee—but I also like watching some of the market’s top coffee stocks.

At the top of my hit list in the coffee sector is Starbucks Corporation (NASDAQ/SBUX), just because of its strong brand recognition not only in the United States but worldwide. Whether it’s in Asia, Europe, or Latin America, you can always find that familiar green Starbucks logo. If they are long-term in their investment strategy, there’s little chance an investor could go wrong with Starbucks.

However, when I have a craving for a baked treat (though I seldom do), I do like the “Boston Kreme” donut and “Cheddar Cheese Bagel Twist” at Dunkin’ Donuts, operated by Dunkin Brands Group, Inc. (NASDAQ/DNKN), which also owns Baskin-Robbins. Dunkin is known more for its donuts than its coffee; nevertheless, it is a coffee shop that many customers will venture out to for a sweet treat.


Dunkin is still primary an American brand, but the company is considering returning to the United Kingdom. The company is looking at opening 50 outlets in the greater London area within five years, but that number could run as high as 150 outlets in the United Kingdom. (Source: Rocco, M., “Dunkin’ Donuts Plans Return to U.K.,” Fox Business Network web site, September 12, 2013.) The company also has plans to move into Moscow.

While the expansion plans are encouraging, I really doubt the Dunkin brand can become the global icon that Starbucks has become. In China, for instance, Starbucks is rapidly growing.

An alternative investment opportunity to Dunkin—and a company that the people at Dunkin should be keeping an eye on—is Canada-based Tim Hortons Inc. (NYSE/THI). The company’s product is similar to Dunkin’s, and it is rapidly growing in the United States. As of June 30, 2013, there were 4,304 Tim Hortons outlets in the network, including 807 in the U.S.


In my view, Tim Hortons is more of a threat to Dunkin than Starbucks, especially in the U.S. market, which is growing in importance to Tim Hortons.

The valuation of Tim Hortons is also more attractive, trading at 17.47X its 2014 earnings-per-share (EPS) and a price/earnings-to-growth (PEG) of 1.63; Dunkin is trading at 24.38X its 2014 EPS and a PEG of 1.75.

Dunkin is more of a play on the U.S. coffee market, with its 10,600 outlets, which makes it the second-largest coffee chain in the country after Starbucks.

At this point, from a valuation perspective, I would look more seriously at Tim Hortons than Dunkin.

One final coffee player to watch that is sizzling on the charts is Green Mountain Coffee Roasters, Inc. (NASDAQ/GMCR), which I profiled at the $39.00 level in December. The stock is now trading above $83.00. (Read “Never Mind Starbucks: Green Mountain Coffee Is Worth the Beans.”)

Build Your Portfolio On A Solid Foundation : All You Need To Succeed – in 500 pages of Investing Strategy and Selections

Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today's stock market

Available at

Stock Market Magic:

Building Your Apprentice

Millionaire Portfolio

 All you need to succeed in today’s stock market [Paperback]

Jack A. Bass (Author)

5.0 out of 5 stars  See all reviews (2 customer reviews) | Like 1678

Price: $28.95 & this item ships for FREE with Super Saver Shipping

All You Need To Succeed – in 500 pages of Investing Strategy and Selections

Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today's stock market

Available at

Stock Market Magic:

Building Your Apprentice

Millionaire Portfolio


 All you need to succeed in today’s stock market [Paperback]

Jack A. Bass (Author)

5.0 out of 5 stars  See all reviews (2 customer reviews) | Like 1678

Price: $28.95 & this item ships for FREE with Super Saver Shipping

All You Need To Succeed – in 500 pages of Investing Strategy and Selections

Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today's stock market

Available at

Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today’s stock market [Paperback]

Jack A. Bass (Author)

5.0 out of 5 stars  See all reviews (2 customer reviews) | Like 1678

Price: $28.95 & this item ships for FREE with Super Saver Shipping

Denny’s Serves Up Grand-Slam Returns

By George Leong, B.Comm. for Profit Confidential

We all know that McDonalds Corporation (NYSE/MCD) is the reigning king of the fast food sector and one of the top performers over the past decade, based on my stock analysis.

In fact, my stock analysis suggests that McDonalds’ rivals are trying to emulate what is working at the company rather than compete against the seller of the iconic “Big Mac.”

Burger King Worldwide, Inc. (NYSE/BKW) may be pursuing a similar strategy to McDonalds’ by diversifying its menu offering with new items and value-conscious options, based on my stock analysis.

Yet while Wall Street focuses on McDonalds and its burger-oriented rivals, my stock analysis reveals that a stock that I feel offers better valuation and potential upside is Denny’s Corporation (NASDAQ/DENN). With a market-cap of $552 million, Denny’s is dwarfed by the $102-billion market cap of McDonalds, but that doesn’t mean there isn’t a buying opportunity with Denny’s, based on my stock analysis.

In fact, Denny’s is up 50% over the past 52 weeks and has easily outperformed the S&P 500’s advance of 26.8% and McDonalds’ 11.8% gain, according to my technical analysis.

Denny’s is best known for its “Grand Slam” breakfast offerings. The company has gone through a major structural reorganization in which it sold many of its stores to franchisors, thereby reducing its own operating costs and collecting fees instead. As of March 27, 2013, 1,525 of the company’s 1,689 restaurants were franchised. The end results have been stronger operating numbers and a steady rise in the company’s share price, according to my stock analysis.

About 98 restaurants are situated in Canada, Costa Rica, Mexico, Honduras, Guam, Curacao, Puerto Rico, Dominican Republic, and New Zealand.

And in an aggressive and bold move, Denny’s has been looking at expanding into the highly competitive Chinese market, where the top players are McDonalds and YUM! Brands, Inc. (NYSE/YUM)—owner of the Kentucky Fried Chicken (KFC) and Taco Bell brands. The company’s deal with Great China International Group was recently cancelled, likely due to some poor results from the top players in China, based on my stock analysis.

On the operations end, Denny’s reported adjusted earnings of $0.08 per diluted share in its first-quarter earnings season, up 48.4% year-over-year and a penny above the Thomson Financial consensus earnings-per-share (EPS) estimates. It was the third straight quarter of outperformance.

On a comparative valuation basis, Denny’s trades at 1.16X trailing sales and has a price-to-earnings-growth (PEG) ratio of 0.92, versus 3.71X sales and a PEG ratio of 2.04 for McDonalds.

Now, don’t get me wrong; I still believe McDonalds will continue to be the top player in the restaurant and fast foods sector going forward. (Read “The Secret to Success in the Fast Food Sector.”) But for some added potential, a small-cap such as Denny’s makes sense for the aggressive investor, based on my stock analysis.



Get every new post delivered to your Inbox.

Join 2,278 other followers