Chipotle Mexican Grill, Inc. (NYSE:CMG) has been one of the best growth stories the restaurant industry has seen in a long time.  Since first trading publicly in 2006, the share price has risen from $22.00 to the $300-range as of this writing, or a gain of 1280% in just over six years.  I should have listened to my mom who has been addicted to their food since Chipotle opened near her house in 2005!  Anyway, while I do feel it would be unwise for those who have been holding since the beginning to take at least some profits off of the table, I do think Chipotle has a lot of room to grow and is worth a look.  For those who read my posts regularly, I am rarely bullish on a company with a P/E ratio in the 30's, but this is a rare exception.

Chipotle’s restaurants serve tacos, burritos, and salads made with fresh ingredients in a fast-casual environment.  As of the end of 2011, Chipotle operated 1,230 restaurants; a number that I expect will have grown when the company reports its 2012 results next Tuesday.

There is no real direct competitor to Chipotle; however, I would say the closest is Yum! Brands, Inc. (NYSE:YUM) and their Taco Bell restaurants.  While it is Mexican-style food, in terms of quality and freshness, there is a world of difference between the two brands.  Also, people tend to clearly prefer one brand or the other.  Those who prefer Chipotle’s style of food don’t really go to Taco Bell anyway.

McDonald’s Corporation (NYSE:MCD) is also a competitor for the fast-food dollar, and are becoming more direct competition as they have been gradually shifting to more fresh, wholesome ingredients on their menu.  It is worth noting that McDonald’s held a large share of Chipotle until late 2006, when they decided to end their ownership interest in other businesses and focus on their own.  I wonder if they regret this move, since Chipotle was trading for a small fraction of its current value at the time McDonald’s got out…

Chipotle has had incredible success continuously over the past decade, growing both revenues and earnings at amazing rates, even during the terrible economic period of 2008-2010, during which time Chipotle’s revenues increased by 37.8% and earnings increased by 139%.  Not bad during the worst climate for growing a business in any of our lifetimes thus far.

It is worth noting at this point that Chipotle (as well as McDonald’s and Yum) are very recession-resistant companies, growth aside.  During tough times, people who normally would eat at more upscale restaurants are forced to seek lower-cost options like Chipotle.  During good economic times, those people who couldn’t afford to eat out during the recession once again have money to spend going out to eat.  In other words, although the particular clientele may shift, there will always be business for low-cost foodservice establishments.