In light of Cinco de Mayo, a holiday commemorating Mexico's victory in the Battle of Puebla, three companies specializing in Mexican food and tequila products with high financial strength as of Wednesday are Chuy's Holdings Inc. (CHUY, Financial), Chipotle Mexican Grill Inc. (CMG, Financial) and Becle SAB de CV (MEX:CUERVO, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.
U.S. states loosen coronavirus mandates as new cases decline
New York Governor Andrew Cuomo announced earlier this week that New York and New Jersey will begin lifting capacity restrictions on May 19, allowing restaurants and other food service establishments to return to near-full capacity. The announcement comes as the seven-day average of new Covid-19 cases in the U.S. declined below 50,000 according to Johns Hopkins University statistics.
Cinco de Mayo celebrates Mexico's victory over France in the Battle of Puebla on May 5, 1862. Common traditions include parades, Mexican folk dancing, drinking tequila and eating traditional foods.
As such, investors may find opportunities in companies specializing in Mexican food and tequila products with high financial strength. GuruFocus' financial strength rank considers several ratios like interest coverage, cash-to-debt and debt-to-equity. The rank also considers the Altman Z-score, which measures bankruptcy risk.
Chuy's
Shares of Chuy's (CHUY, Financial) traded around $47.29, showing that the stock is significantly overvalued based on Wednesday's price-to-GF Value ratio of 2.78.
The Austin, Texas-based company operates a network of restaurants that offer Tex-Mex items like enchiladas, fajitas, tacos, burritos and combination platters. GuruFocus ranks the company's financial strength 6 out of 10 on the back of a strong Altman Z-score of 3.31 and interest coverage ratios outperforming over 85% of global competitors.
GuruFocus also gave Chuy's the profitability rank of 6 out of 10 as profit margins and returns top more than 66% of global restaurant companies.
Gurus with holdings in Chuy's include Chuck Royce (Trades, Portfolio)'s Royce Investment Partners and Jim Simons (Trades, Portfolio)' Renaissance Technologies.
Chipotle
Shares of Chipotle (CMG, Financial) traded around $1,429, showing that the stock is significantly overvalued based on Wednesday's price-to-GF Value ratio of 1.475.
The Newport Beach, California-based fast-casual restaurant chain offers items like tacos, burritos and quesadillas. GuruFocus ranks the company's financial strength 6 out of 10: Even though debt ratios underperform more than half of global competitors, Chipotle has a strong Altman Z-score of 8.35 and an interest coverage ratio that outperforms over 89.39% of global competitors.
Gurus with large holdings in Chipotle include Bill Ackman (Trades, Portfolio)'s Pershing Square and Spiros Segalas (Trades, Portfolio)' Harbor Capital Appreciation Fund.
Becle
Shares of Becle (MEX:CUERVO, Financial) traded around 49.27 pesos ($2.43), showing that the stock is significantly overvalued based on Wednesday's price-to-GF Value ratio of 1.59.
The Mexican beverage company produces and sells a wide range of liquor and spirits products through brands like 1800 Tequila and Maestro Tequilero. GuruFocus ranks the company's financial strength 6 out of 10 on the heels of a strong Altman Z-score of 4.59 coupled with interest coverage and debt ratios outperforming over 60% of global competitors.
Disclosure: No positions.
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