Stocks

Whining about the Chipolte – An interesting psychological study

Big earnings miss at CMG is not good news for Ackman or SEQUX at least on the surface. See below for some other takes but first  one sell side reaction… analysts at Stifel opine In our recent initiation report, we told investors we believed EPS estimates were too high because of rising avocado prices and investment…………….unfortunately, we have rarely seen it work, therefore, we maintain our HOLD rating and lower our price target to $310 from $345.

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 SunTrust analysts state: We are maintaining our BUY rating on CMG despite guidance for sharply lower '18 unit growth (+5.8% vs. +8.0% in '17), given our view that CMG's nascent SSS recovery (+1.5-2.5%) will gain momentum and, in turn, drive a reacceleration of unit growth in '19. states:

A hold but reduce PT does not make much sesne but it is common on the sell-side.

But would Avocado prices really have an impact on bottom line even in a low margin business?

More on CMG from CSinvesting with a value/behavioral investing angle via CSInvesting

This makes an interesting psychological study.  Who holds the stock and how they react.   ($CMG last at $278, down 14.5%)  Many conversations below show no interest in discussing the valuation of CMG, but just the price (and if the price is declining, the pitiful management).

 

Also, note the focus on P/E ratio for valuation.   What about the flaws in using P/Es as a valuation metric?   No discussion about the business, cash flows or discount rate.

CMG will probably trade north of 6 million shares today or about 20% of the 28.5 million outstanding shares.  Where are the long-term shareholders?  One in five investors will sell based on one quarterly report.If you have done your homework on valuation, then unreflective sellers who are throwing in the towel may mean an attractive price over the next few weeks.

I don’t know much about Chipolte, but management should be able to right the ship OVER TIME–the next 24 months–not next quarter. I don’t own any CMG currently.

AlabamaHobo

Why does a burrito company trades for 70 PE.

Lots of room all the way down to 15 PE.

DowPete
DowPete yesterday
Ackman has been unusually quiet about his position in Shipotle. For someone who is forever whining, the silence is golden. Glad he’s underwater in $CMG.

Mad
Mad

13 hours ago
200$ may not be that impossible tomorrow or later.

CowboyFan
CowboyFan

13 hours ago
Overvalued stock , for a burrito company.

CowboyFan
CowboyFan

14 hours ago
What a POS! Seriously , this is a $40 stock
BB
BB

16 hours ago
Why does almost every retail restaurant or fast food chain trade at 15-25xs earnings and Chipotle get to trade at >60xs? Its still way overpriced, should be $100/share or less. Concept is easily duplicatable and has been many times now. Theres plenty of fast food burrito places out there now..

Tenley
Tenley

10 hours ago
I want a refund on my burrito. It taste weird…
DaveR
DaveR

20 hours ago
Even a lemonade stand could beat the latest benchmark for CMG earnings. If they miss this bunny forget about it.

Jh
Jh

14 hours ago
Fair market value $50

joe
joe

16 hours ago
Hundreds of high school students chow down at these restaurants every day. Me too

liberal
liberal

1 hour ago
I’m loving this fall, hope it goes on through the day and we see 270s today. Make some mulla on those put options from yesterday

CT
CT

4 hours ago

The battle line is drawn at $295 ps. Buyers must buy at this previously held level – otherwise, it is abandoned and a new lower strength level is found. But holding this level will be difficult as it represents a triple bottom.

My bet is that the shares go lower. Once the dam at $295 is broken, the selling will accelerate and we may end up the day at -20%.

Jerome R
Jerome R

23 hours ago
20% short interest on a 25 mill float, see you at $400 after ER
Jerome R
Jerome R

23 hours ago
20% short interest on a 25 mill float, see you at $400 after ER
S.P.
S.P.

17 hours ago
Owning this stock is like having CMG’s molten cheese poured on

george
george

20 hours ago
Bloodbath coming after hours. The bombs start decimating your portfolio at 4:30 PM. Get your shovel out to dig your own grave. Just jump in, we’ll kick some dirt on top of you.

Mocula
Mocula

13 hours ago
What was the total compensation for the CEO this year? The small amount of money I lost on this stock, means nothing to the officers. As long as they car drive a fancy car or pay a lot for a douchebag haircut, they will just continue to make excuses and take as much as they can.