You may make tons of money in stocks without following the latest tech trend. Peter Lynch says buying emerging consumer brand shares before they're well-known is a great investment
Three Motley Fool authors were asked to suggest three attractive long-term investments with near-term upside. The reasons Cava Group (NYSE: CAVA), MercadoLibre (NASDAQ: MELI), and Dutch Bros (NYSE: BROS) qualified.
Latest fast-casual star: Jeremy Bowman (Cava Group) Cava Group is one of the most intriguing recent IPOs. Its fast-casual style has earned it comparisons to Chipotle Mexican Grill. Chipotle serves Mexican food, whereas Cava serves Mediterranean. It provides bowls and burrito-like pita wraps. Chipotle's sleek industrial decor is reflected in its restaurant design.
Cava has had strong financial success in its short public business history. In its fourth-quarter results report, the company recorded a 52.5% revenue gain to $175.5 million, led by 11.4% same-store sales growth and aggressive new expansions, as its store base rose 30% to 309.
Other data shows its eateries are popular, as average unit volumes, or annual revenue, were $2.6 million. That is stronger than most of its contemporaries, and double-digit comparable sales growth indicates significant expansion.
The corporation is barely profitable under GAAP. Its restaurant-level profit margins are excellent at 24.8% for 2023, indicating that GAAP profit margins should rise as the firm grows and corporate costs drop.
Panera Founder Ron Shaich is Cava's chairman and an early investor. After rising nearly 70% this year, the company appears like a good bet to keep rising as its valuation is still affordable and its earnings have handily outperformed projections. Cava's long-term growth potential is being recognized by investors, and the stock should rise as the company grows.
A major e-commerce opportunity Jennifer Saibil (MercadoLibre): As e-commerce grows as a percentage of retail sales, retailers of all kinds are adapting to meet demand. Some companies have a headstart that will boost income for years. At 19% of worldwide retail sales in 2023, e-commerce is predicted to reach 24% by 2027. Still, years of growth remain.
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