Keep in mind that CMG is rich in valuation, trading at 5.2 times sales. That is a crazy level of valuation for a restaurant stock. Sales have more than doubled in the last 4 years, which is a growth rate of 18%. After-tax margins are hovering near 10%. However you look at it, CMG is priced for massive growth and profits. The free cash flow is $300 million, which is less than 2% of its market value today. If you bought CMG today, that would be your return: 2%. Granted, that number is growing but so are the competitors. QDoba's are opening all over my area, for example. It will take another 4 years for this stock to grow into it's current valuation, in my opinion.
Suggestion: Sell short: 548 stop. 502 target. Risk 1 ATR. Reward 3 ATR's.
11:36AM EST, May 28, 2014 536.96 last +0.92