Food with integrity?
While CMG has been successful they still only have 1,637 restaurants and plan to open 180-195 new restaurants this year. The growth opportunity still has a ways to go with a target of 4,000 stores in the US with CMG likely having double digit store openings for the next decade. The cash on cash returns for new stores are amazing at 72% which compares to the industry averages of 25%-35%.
CMG is the leader in fast casual dining and is benefiting from the trend towards healthy eating. The only problem is the price, the multiple on the stock has priced in some of these near term opportunities. Much like CMG lines we will wait in line and hope we will get served up a better price.