This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Is Dunkin' the Next Chipotle?

Stocks in this article: DNKN CMG MCD SBUX

NEW YORK ( TheStreet) -- Once upon a time, there was a unique chain of Mexican-style fast-food restaurants that made some of the best burritos around, at a reasonable price.

Ironically they were owned by a very big, powerful fast-food dynasty known as McDonald's (MCD). McDonald's decided to spin-off the chain of Mexican-style fast-food restaurants. We know these restaurants under the spicy name Chipotle Mexican Grill (CMG). CMG happens to be in correction mode on Wednesday June 27, down almost 6% on over triple the average daily volume.

According to Investor's Business Daily , CMG fell after Investment Technology Group said in a report that "Chipotle's same-store sales comparisons appear to be decelerating sequentially."

ITG estimated Chipotle's second-quarter same-store sales growth at 7.5% year over year. The Wall Street consensus is for CMG to experience close to 10% same-store sales growth.

Now back to our story. As we board our WSTM, or Wall Street Time Machine, conceived many years ago by H.G. Wells, we return to the week of March 6, 2006 and we purchase 200 shares of CMG stock at $41-a-share.

Then we push the "back-to-the-future" button on our WSTM to the week of April 9, 2012 when we sell our 200 shares for a jaw-dropping $442-a-share.

Our original $8,200 investment is sold for $88,400. That's a total return of 1,078%, and we have almost enough money to buy a low-end Tesla electric car.

Except for those on the WSTM, this story has happened to a small number of very lucky investors who saw the potential growth of CMG, as the 6-year chart below demonstrates.

Notice that after running up to almost $150 a share in the week of Dec. 24, 2007, you could have purchased more shares during the week of Nov. 17, 2008 for $36.86, and for the next 3.4 years you would have experienced quite a ride.


We don't have the luxury of going back to the past or accelerating back to the future, but with perfect 20-20 hindsight, we know what is possible.

Who would have dreamed this could happen to a fast-food restaurant stock? Well for starters, how about the brilliant visionaries who purchased MCD or Starbucks (SBUX) back when their stocks debuted on the public markets.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,073.17 +42.96 0.24%
S&P 500 2,091.25 +9.37 0.45%
NASDAQ 4,813.4370 +39.9650 0.84%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs