Buying stock in the best companies can help you build meaningful wealth for you and your family. And the highest quality companies can see their stock prices rise significantly. for example, Chipotle Mexican Grill Co. (NYSE:CMG) stock is up 311% over the past five years, which is a nice return for long-term holders. If that doesn't make you think about long-term investing, we don't know what will. What's more, the stock is up 21% in about a quarter.
It's also worth looking at the company's fundamentals here. That's because it helps determine whether long-term shareholder returns are consistent with the performance of the underlying business.
Check out our latest analysis for Chipotle Mexican Grill.
To paraphrase Benjamin Graham, in the short term the market is a voting machine, but in the long term it is a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can learn how investor attitudes to a company have changed over time.
Over five years, Chipotle Mexican Grill was able to grow its earnings per share at a rate of 48% per year. The EPS growth is more impressive than the 33% annual share price increase over the same period. As such, the market doesn't seem to be too enthusiastic about this stock lately. Of course, the P/E ratio is 61.51x, so the market remains optimistic.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide for a business. Dive deeper into its earnings by checking this interactive graph of Chipotle Mexican Grill's earnings, revenue and cash flow.
different perspective
It's good to see that Chipotle Mexican Grill achieved shareholder returns of 71% over the last twelve months. This is better than the 33% annualized return over the past five years, suggesting the company's recent performance has been strong. In the best-case scenario, this could signal real business momentum and suggest that now could be a great time to dig deeper. It's always interesting to track stock performance over the long term. But to better understand Chipotle Mexican Grill, you need to consider many other factors. To do so, you need to know the following: 1 warning sign I discovered Chipotle Mexican Grill.
Chipotle Mexican Grill isn't the only stock that insiders are buying.For people who like searching succeed in investing this free This list of growing companies with recent insider purchasing may be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
