We have a soft spot for cookie-cutter stories, as they offer the rapid, reliable growth that big investors pine for, explains Mike Cintolo, editor of Cabot Growth Investor.
Wingstop (WING) offers chicken wings in a couple dozen flavors, along with fries and the like — it had 1,413 restaurants at the end of March, up 11% from a year ago, and long-term, the firm sees room for 3,000 locations in the U.S. and another 3,000 overseas.
Long-term, the goal is to be a top-10 global restaurant chain! Wingstop was already digitally savvy and takeout-oriented heading into COVID (80% of business was takeout or delivery before the crisis).
And that’s helped in a big way — Q1 was solid (sales up 15%, including same-store sales up 10%), and April’s same-store sales rose more than 30%.
Nobody expects that growth rate to continue, but the big idea is that Wingstop already had a huge opportunity and the story has only picked up steam of late.
s for the stock, it won’t be the fastest mover, but after a huge recovery and calm five-week rest, we think it’s close to resuming its advance (though again, another shakeout is possible).
Be aware that the stock can trade thinly, so try not to place overnight orders. Our loss limit will be in the low $100s. We rate the stock a buy.
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