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3 Cheaper Alternatives to High-Priced Momo Stocks

Don't be lured by the flash of these momentum stocks when there are much better alternatives you can buy

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CNN Money commentator Paul La Monica tweeted the following at StockTwits July 22:

momentum stocks to buy“If $Cmg stock is too rich your blood, you might want to check out $Jack. Up 3% today. Owns Qdoba. P/E about half of what Chiptole’s is.”

Paul, I like the way you think!

I suggested the exact same thing in March 2012. How’d my recommendation turn out? Chipotle Mexican Grill (CMG) gained 56% through July 23 compared to 141% for Jack in the Box (JACK). It made sense then, and I think it still makes sense today.

I bring this up because there are plenty of other examples of “momo” stocks out there where the “it” stock is super expensive while another peer, although operationally sound, is valued at substantially less — providing a potentially larger margin of safety like JACK does.

Here are three cheaper alternatives to high-priced momentum stocks:

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