food costs!

First on the list is Chipotle Mexican Grill, Chipotle is certainly in a class of its own; I should know I eat there 3-4 times a week. Chipotle specializes in high quality Mexican fast food, something no other company has successfully implemented. If you attempt to look at CMG qualitatively and quantitatively as I did before I ate there odds are you would have missed out on the last 20 or so points. Chipotles balance sheet is just ok, with profit margins meeting the industry average. With 581 restaurants nationwide their domestic growth might slow thus requiring international expansion which the company many not be ready for. CMG also uses a large flour based corn shell for their burrito; with corn doubling the past year shouldn’t that hurt their profit margins? The shorts where banking this thesis, but a quick trip to a Chipotle tells you that they got it all Wrong! CMG just blew earnings out of the park despite the negatives which I just presented. While I do believe the company is fairly valued here; (mid-70s to low 80s) we can use a top down approach in analyzing Chipotles success. First, Chipotle uses all fresh ingredients which it prepares right in front of you; everything from the fresh lettuce to the tasty guacamole is made that day. Second, Chipotle has a very limited menu to choose from, this allows the company to get large bulk pricing. Third, Chipotles has total market share of a niche based product; if you are like me and love Mexican food you at Chipotle more then once a week Short Position 31%, Revenue of $872MM, Market Cap $2.77B

Domino's Pizza, Inc., through its subsidiary, Domino's, Inc., operates as a pizza delivery company primarily in the United States. It sells and delivers pizzas under the �Domino's Pizza' brand name. As of December 31, 2006, the company operated through a network of 8,366 company-owned and franchise stores located in all 50 states and approximately in 50 countries Best of Breed. Near its 52 Week-Low. Does not really fit into the DRI model though. Short Position 7%, Revenue $1.43B, Market Cap $1.18B

Red Robin like Chipotle has a very unassuming balance sheet with gross margins slightly above the industry standard. Recently Red Robin reported that first-quarter revenue jumped 24.5% in its latest quarter, to $212.3 million. However, a 25.7% increase in total costs and expenses essentially flattened earnings for the period. With a 23% short position investors might be scared away of this stock based on numbers, earnings etc. Red Robin’s hamburgers are delicious; clearly they use a high quantity meat. With 360 restaurants nationwide there will be no problem expanding domestically for a few years. A relativity unknown stock with little coverage, potential for growth, high short position and most important a taste burger Red Robin might look tasty in your portfolio. Short Position of 22%, Revenue of $ 660.51MM, Market Cap of $691.28MM

Brinker International, Inc. primarily engages in the ownership, operation, development, and franchising of restaurant brands in the United States. It operates restaurants under the names of Chili's Grill & Bar, Romano's Macaroni Grill, Maggiano's Little Italy, and On The Border Mexican Grill & Cantina. As of June 28, 2006, the company operated 1,622 jointly-developed and franchised restaurants located in 49 states, and Washington, D.C. Brinker International also has restaurants in the countries of Australia, Bahrain, Canada, Egypt, Great Britain, Germany, Guatemala, Indonesia, Japan, Kuwait, Lebanon, Malaysia, Mexico, Oman, Peru, the Philippines, Puerto Rico, Qatar, Saudi Arabia, South Korea, Taiwan, the United Arab Emirates, and Venezuela. Short Position of 13%, Revenue of $4.3B, Market Cap of $3.38N

Ruby Tuesday, Inc., together with its subsidiaries, engages in the development, ownership, operation, and franchising of Ruby Tuesday brand casual dining restaurants. As of October 23, 2006, it owned, operated, or franchised 900 casual dining restaurants primarily in the United States, the Asia Pacific region, India, Kuwait, Puerto Rico, Canada, Mexico, Iceland, Eastern Europe, and Central and South America. Short Position 18%, Total Revenue $1.4BB, Market Cap $1.45

Papa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the trademark Papa John's in the United States and internationally. It also operates and franchises dine-in and restaurant-based delivery restaurants in certain international markets. As of December 31, 2006, the company operated 3,015 Papa John's restaurants, including 588 company-owned and 2,427 franchised restaurants in 49 states, the District of Columbia, and Puerto Rico; and in 26 countries. Short Position of 10%, Total Revenue $1.02B