Fast food Mexican restaurant Chipotle Mexican Grill Inc (NYSE: CMG), a spin-off of McDonald's Corporation (NYSE: MCD), is down a little over 2% today after a negative Barron's Online article. The Barron's "Weekday Trader" article stated that after hitting an all-time high yesterday, the stock is due to fall. It cites two downgrades of Chipotle from earlier this summer, the rise in the prices of ingredients, and the fact that Americans are eating out less.
With as much market uncertainty as we are seeing, and the fear the uncertainty is causing among investors, stocks trading at such high multiples -- such as Chipotle's 54x 2007 P/E ratio, are due to fall. The only question now is -- how far?
Editor's Note: Special shout out to BloggingStocks' own Georges Yared, who is quoted in the Barron's article.











Reader Comments (Page 1 of 1)
8-09-2007 @ 10:28PM
Cwolfe said...
Investors, so to speak, are the most fickle group of individuals I have ever seen. In no other industry that I know of does anyone let the he said/she said (analysts ratings) control or majorly influenece their business decisions! We must realize that at times, analysts will state their position based on what "they" would like to see the stock do so as to benefit their position, whether it be buy or sell...remeber, they control sometimes tens of thousands of shares and they have to make a profit one way or another! The bottom line concerning Chipotle is, this company makes money hand over fist based on a very simple and efective business model...give us what we want, high quality naturaly raised food at an affordable price, in a pleasant environment. I as a shareholder that did not buy at the ipo price, am extremely pleased with the company's ongoing forward momentem in everything they do, and they do it well. If you haven't eaten there, you owe it to yourself. I think it is still a great value and worth owning. I predict a multiple split in the near future. Just my thoughts.
8-17-2007 @ 12:21PM
hound dog said...
I agree completely. I hate when people talk off the hip and sway thoughts. This stock will do just as Starbucks did and split several times before it settle in at a nice 50-60. So, quit talking unless you have firm facts and let the stock rise like it should based on the facts.