Make mine to go
Chipotle Mexican Grill, Inc. (NYSE:CMG) is also taking advantage of the shift in consumer demand towards foods that are better for us and the planet, for people looking for a meal on the go. While many fear that the Chipotle Mexican Grill, Inc. (NYSE:CMG) concept is limited as to how much more it can grow, I’m convinced that with only 1,400 or so locations (less than 30 per state) there’s still plenty of room to expand, and that’s just domestically. International growth potential is immense; and we haven’t even talked about the new ShopHouse Southeast Asian concept. It may have as much potential as Chipotle’s flagship.
Lastly, Chipotle also carries a rich valuation, with a forward PE ratio in the mid-30’s, but when we look at its historic PE valuation, the company is well within the medium to low end of Mister Market’s value range. And with so much growth potential, you could miss out on a “ten bagger” waiting for a more McDonald’s Corporation (NYSE:MCD)–like valuation in the low-20s.
Water is heavy; add the bubbles at home!
Sodastream International Ltd (NASDAQ:SODA)’s basic technology and concept has been around for decades, with little real success in North America until recently. With it’s IPO in late 2010, and using much of the capital raised from the IPO to start aggressive expansion, the Israeli company has started to establish a strong foothold into the soda business in the U.S. Two recent reasons for investors to dig deeper: Recent deals with Samsung for built-in dispensing systems in its refrigerators, and just this week with KitchenAid for co-branded home carbonators, further establishing more mainstream adoption channels for its products.
There is serious potential for heavy competition from PepsiCo, Inc. (NYSE:PEP) and The Coca-Cola Company (NYSE:KO) as Sodastream International Ltd (NASDAQ:SODA) takes more market share from the two bubbly water heavyweights. But I’ve maintained since I started following the company that a partnership seems much more likely to me, if not an outright acquisition.
Foolish bottom line
I’ve invested in all of these companies, and for me, the optimal holding period is “forever.” Only time will tell how it works out, but I can’t think of another five companies that are all more central to the shifting way we consume and think about foods, both at home and on the go. That’s a great sign that in the long-term, I’ll be rewarded.
The article A Regular Fool’s Retirement Portfolio: Better for You Foods originally appeared on Fool.com.
Jason Hall owns shares of Chipotle Mexican Grill, Whole Foods Market, SodaStream, and Hain Celestial. The Motley Fool recommends Chipotle Mexican Grill, Hain Celestial, SodaStream, and Whole Foods Market. The Motley Fool owns shares of Chipotle Mexican Grill, Hain Celestial, SodaStream, and Whole Foods Market. Jason is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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