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Author: HOGridin Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 430  
Subject: taking a gold & a silver Date: 9/16/2008 11:51 PM
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In the theme of the now completed Olympics, TMF brought two of our favorite to the podium in a recent article.

Gold: Chipotle Mexican Grill
Shares of Chipotle Mexican Grill have given investors a wild ride lately. The company blew past Wall Street's profit targets in its first eight quarters as a public company, but it's come up short in two of the past three periods.

Is Chipotle falling apart like an unrolled barbacoa burrito? I don't think so. Let's take a closer look at last month's "miss" of a quarterly report. Profits increased 23% to $0.74 a share. A 7.1% uptick in same-store sales and smart expansion fueled a 24% gain on the top line. The market was holding out for a little more, but take a look around. Do you see any other chain pulling in these kinds of numbers in this tricky environment?

Chipotle spoiled investors with perpetual double-digit gains in comps, but if it can deliver its current healthy overall results in an operating climate where both margins and patrons are being squeezed, you have to really like Chipotle's prospects when we start eating out again in even larger numbers. Chipotle is now trading at 24 times next year's profit target. It hasn't traded at a multiple this attractive since its IPO. That worked out well for the company's initial investors, and it should have the same favorable result this time around, too.

Silver: McDonald's
Did somebody say McDonald's The world's largest fast-food chain -- with more than 31,000 burger-flipping hubs, and counting, on the planet -- is lovin' it these days. Thrifty times call for thrifty meals, and the golden arches are there to serve.

Few restaurant stocks currently tempt analysts to inch their earnings guesstimates higher, but McDonald's is one of them. The company has easily topped Wall Street's expectations in recent quarters; its Dollar Menu draws in consumers, while upsell items such as premium salads and chicken-breast sandwiches broaden its offerings with healthier alternatives.

McDonald's is rolling along nicely this summer. Stateside comps shot up 6.7% last month, as burger chains such as Burger King and McDonald's draw both regulars and more finicky eaters who are downsizing their restaurant spending.

This story may be old news to some. The stock is a five-bagger since bottoming out five years ago. However, between its healthy 2.3% yield and its attractive valuation (just 17 times next year's estimated earnings), Mickey D's is an opportunity worth repeating.
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