Chapter 12. The Buy High, Sell Higher Screen
Imagine that you've stumbled upon the perfect growth stock. It's a chain of casual restaurants that's doing big business in your area: Cha-Ching Bar & Grill. The menu offers burgers and ribs and such that draw hearty eaters, but also healthy dishes that appeal to calorie counters. In just a couple of years of operation, Cha-Ching has become the place to go to watch the big game, to stop in for a drink after work, to eat before going to the movies, and to host a kid's birthday party.
Not only are the restaurants packed for lunch and dinner on most days, but also management has figured out other ways of making money. Cha-Ching does a brisk delivery and pick-up business. It sells its popular barbecue sauce by the bottle, along with Cha-Ching shirts and baseball caps. Gift certificates have also proven a hit.
You decide to check out the company on the Internet and are delighted to find that it's publicly traded. That is, you can buy shares.
Looking through Cha-Ching's financials, you learn that sales and earnings are growing nicely and margins are gradually improving as the company expands. Debt is negligible. Comparable dining chains, you notice, have several hundred restaurants, are spread across broad swaths of the country, and are still growing. Cha-Ching has just 25 restaurants, but has plans to open 8 more this year. It just opened its first restaurant in a neighboring state.
You're thrilled with the discovery. You just happen to live near ...
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