IB Net Payout Yields Model

2 Stocks To Buy Using The Chipotle Example

After reviewing the top gainers in the S&P 500 since March 9, 2009 provided by Bespoke Investment Group, one stock really stuck out. Chipotle Mexican Grill (CMG) generated one of the largest gains at nearly 1,000% during that period. What really stood out is that Chipotle unlike other stocks on the list was considered a high quality company all along yet it presented several extreme-buying opportunities over those years.

Using that same general concept of buying quality stocks on dips, a couple of top performing companies with huge opportunities really stick out. Both Yelp (YELP) and Zillow (Z) have very desirable, market leading models. The issue is that the stocks trade at high multiples that make the stocks difficult to purchase at the current levels. Following the Chipotle example, the market will provide several opportunities in the future to buy these stocks at lower multiples. The key is whether investors are prepared and ready to pounce when it occurs.

Read the full article at Seeking Alpha.

Disclosure: No positions mentioned. Please review the disclaimer page for more details. 


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