I think even McDonald’s would agree with that headline because Chipotle Mexican Grill (NYSE: CMG) actually used to be a part of McDonald’s, which helped get it off the ground. The concept of a fast-food restaurant specializing in higher-quality Mexican food was originated in 1993 by founder and CEO Steven Ells in Denver, Colorado, and McDonald’s made a strategic investment in Chipotle in 1998 so he would have enough capital to bring his idea to fruition.

And boy did he! Since then, the success of Chipotle has been nothing short of staggering. Not only is Chipotle changing the game, but we are only in the second inning of the game, so now is the time to buy.

Organic Food—and Growth!

I’ve actually liked Chipotle for some time. I even wrote about it in my book Baby Boomer Investing: Where Do We Go from Here? , which came out last year. In it, I highlighted more than 40 companies that I thought would be relevant for the next 10 years. Chipotle was one because it is redefining fast food by adding casual dining features for only slightly more cost to the consumer.

First, there’s the menu. It’s a brilliant combination of quality and simplicity. The theme posited by Chipotle is “all natural ingredients,” which taps into a current and powerful trend toward natural, healthier food.

Chipotle offers a limited menu of chicken, shredded beef, marinated steak and pork served in either a homemade burrito, taco shells or a salad. The meats and poultry come from animals that are fed a vegetarian diet and raised without hormones or antibiotics. You can also get organic tomatoes, corn, avocados and lettuce. Meals are prepared right in front of you in an “assembly line” style, allowing you to choose the ingredients you want to include.

You can also buy fountain soft drinks, bottled premium drinks, even Margaritas and Mexican beer! Side dishes include chips, salsa and guacamole.

That’s it, the whole menu, and it is taking the fast-food industry by storm.

The customer base (my family included) is fiercely loyal as the food is awesome. The average customer pays between $8 and $9, slightly higher than traditional fast-food fare, and includes every demographic—from young and old to male and female. Repeat customers provide nearly 85% of revenues, which is stunning. And based on what I’m hearing and observing, Chipotle has passed McDonald’s as the restaurant of choice for teenagers, who will surely continue frequenting the restaurant as they get older.

A True GameChanger

Chipotle currently has 730 restaurants in 33 states, and here’s the exciting part: I believe they could easily quadruple that number to 3,000 here in the U.S. alone and eventually expand into other countries as well.

The fast food scene in the United States is currently dominated by burger and pizza joints like McDonald’s, Burger King, Wendy’s, Pizza Hut, Papa John’s and Domino’s. Chipotle is changing the game and taking market share away from these stalwarts with its higher-quality Mexican food.

Chipotle’s major competitor is Taco Bell, which is run by Yum Brands. But if you’ve ever been to a Taco Bell, you know it offers far inferior food with processed, pre-packaged ingredients. Chipotle’s ingredients are always fresh. You may also be familiar with Baja Fresh, which was a part of Wendy’s but was sold off in late 2006 to a private equity group. The Baja Fresh concept has suffered from execution issues for the past six years, and Wendy’s took a $244 million hit when it sold the chain.

With no other serious competitor on the national scene, Chipotle has the opportunity to dramatically grow its revenue from $1.35 billion this year to $10 billion within the next 5–6 years. That will get investors’ attention!

This GameChanger has the senior management team to do it. As you know, I love it when the visionary that founded a GameChanger is still in charge, and that’s the case with Chipotle. Chairman and CEO Steven Ells is as driven today as he was 15 years ago.

His management team is laser-focused on execution, and the company is performing like the GameChanger it is. Chipotle is both growing its customer base and building its brand while still maintaining operating margins of 10%–11%. Those are amazing numbers to achieve while also reinvesting massively in new restaurants, brand marketing and developing the mid-level management team so crucial to future success.

A Great Buying Opportunity

Chipotle came public a little over two years ago (January 26, 2006) at $22 per share and proceeded to double on the first day. The stock has been a rocket ship ever since, hitting an all-time high of $155.49 last New Year’s Eve. That’s a 600% surge in two years.

Last fall, I wrote an article for AOL and said that, at $135, I thought the stock had gotten ahead of itself and that investors should wait for a better entry price. I’ve been watching the stock ever since, and we are now at that point. The stock has pulled back to around $90, even though the company has posted two excellent quarters in a row.

This is our chance to pounce because the pullback is purely from external factors, not any flaws in Chipotle’s business or execution. On the one hand, a lot of consumer stocks were hit earlier this year over fears of a spending slowdown. This is a short-term concern, and as we talk about in this month’s GameChangers issue, I expect a much stronger second half of the year.

In addition, the restaurant sector has also been hit by higher food costs. But this is actually one area where Chipotle separates itself from the pack in two ways: First, the company has wisely locked in prices on items such as rice and corn through forward contracts.

And second, Chipotle has been able to raise prices without a hint of a slowdown in business. That’s the kind of pricing power we expect of GameChangers! In the Northeast, the company raised prices nearly 9% in two separate moves in the past six months. In the Midwest and Pacific Northwest, prices increased 7%. Customers continue to flock in.

Investors have taken down restaurant stocks due to higher food costs and the fear that consumers won’t pay higher prices. Not so with Chipotle, which is bucking the trend—as GameChangers do—because it offers a superior product that people are willing to pay for.

Targeting a Double

Chipotle reminds me of another GameChanger at a similar point in its growth cycle: Starbucks (which we may buy soon, I’ll keep you posted). You have a new and exciting concept, minimal or fragmented competition, and a national focus. Also like Starbucks, Chipotle has a growing number of outlets, an expanding and fiercely loyal customer base, and superb pricing power. And through it all, Chipotle is maintaining excellent profitability, which the institutional investors love to see.

Starbucks’ P/E ratio was consistently in the 45–75 range during its equivalent 8–10 year period of exciting growth. Chipotle’s P/E is right around 40, and I look for that to expand in the coming months and years.

In sum, I look for Chipotle to be the most successful restaurant concept for the next five years or more. Take advantage of the recent pullback and buy CMG under $110. I see this GameChanger doubling within the next two years, if not sooner. Other analysts I know who follow Chipotle are targeting $200 in the next 12 months, which would be fine with me!

Actually, I wouldn’t be surprised if Chipotle becomes even more of a GameChanger when it starts to expand internationally, but let’s go for the double first!