Buffett's Favorite Business Trait

Buffett's favorite trait found in a surprising company.

Chris Hill
Chris Hill, Simon Erickson, and Mark Reeth
Jul 22, 2014 at 8:15PM
Consumer Goods

On Tuesday's Market Foolery, host Chris Hill, Motley Fool Rule Breakers analyst, Simon Erickson, and Fool.com analyst, Mark Reeth, lay out Buffett's favorite trait and find it in Chipotle (NYSE:CMG).

Chris explains Warren Buffett's single most important decision in evaluating a business is pricing power. If a company can raise prices and customers don't bat an eye, then that's the business you want to look at. Chris looks at Chipotle's latest earnings and found same-store sales up 17% even while raising prices. Simon notes that the raises came because of cost inflation on some of Chipotle's menu items and then he moves into the amount of new traffic for the fast-food chain. Mark adds that the company has only opened 45 new locations and he likes that the company made a wise decision in this. Chris sees large growth opportunities in store openings - yet he concedes that shareholders may find such a small number of new locations something to balk at.