Stupid Stock Move of the Day! Chipotle down 6%?
June 27, 2012: 3:07 PM ET#StupidStock Move of the Day! Chipotle a huge fave of Mrs. Buzz & @CNNMoney video crew. But down 4.5% today on Q2 worries. An overreaction?—
Paul R. La Monica (@LaMonicaBuzz) June 27, 2012
My wife raves about Chipotle (CMG). I'm always seeing the 20-somethings in my office grabbing burrito bowls from there as well. I amazingly enough have never been to one despite loving Mexican food. But it seems like it's incredibly popular.
So I was very surprised to see that the stock was plunging Wednesday. It seems that a cautious analyst report is being cited as the reason.
Did an ITG analyst's slower sales prediction really just cause Chipotle to lose 6% of its value in one day? $CMG—
Bespoke (@bespokeinvest) June 27, 2012
Others seem to worry that the so-called smart money may finally be fleeing the stock. After all, shares are still up 16% year-to-date and have surged 30% in the past 12 months.
I wouldn't touch $CMG with a 10-ft pole here, not when institutions are dumping the stock in spades—
Ken Shreve (@KenShreve) June 27, 2012
Chipotle has held up well even as other fast food chains such as former parent company McDonald's (MCD), Yum Brands (YUM) and Wendy's (WEN) have recently pulled back on growth fears.
I get why investors are nervous. Chipotle is still a very expensive stock, trading at nearly 45 times 2012 earnings forecasts. And just because I know people who like the food doesn't mean it is a screaming buy. Facebook (FB) has 900 million users. It's popular. How did that IPO turn out? Nonetheless, at least one restaurant analyst thinks investors may be underestimating the company's momentum.
$GOOG trends suggest that the sell-side is too bearish on $CMG current same-store sales trends... for what it worth.... http://t.co/X29bcuiJ—
Howard Penney (@HedgeyeHWP) June 27, 2012
That's a compelling chart. If Chipotle defies the skeptics when it reports its latest results, the stock could be muy caliente once again.
