| Stock (Symbol) | Stock Price | |
Chipotle (CMG) |
$265 |
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| Data is as of | Expected to Report | Sector |
November 5, 2012 |
Jan 28 |
Retail & Restaurant |
| Sharek’s Take | ||
 Chipotle stock has dropped from $400 to $250 but even after the fall the stock’s not undervalued. CMG is oh-so-close to its 2013 Fair Value. Still — even with the stock selling where it should — I’m holding it for now because the current 25 P/E is low by historic standards and that P/E could go to 35 next year.The real reason CMG dropped is because same store sales growth slowed from 13% to 5% the last three quarters. Same-store sales growth was 5% LastQtr, 8% 2QtrsAgo, 13% 3QtrsAgo, 11% 4QtrsAgo. Food costs are also eating into profit margins, and management usually offsets this by raising prices. But it doesn’t look like raising prices is an option now, so CMG has little good news going for it. |
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| One-Year Chart | ||
 Note profit growth was a sizzling 56% 2QtrsAgo. The company also beat handily that quarter. LastQtr it didn’t beat the street and had only 19% profit growth. The only true sell signal was two quarters ago when the P/E was 46 and the stock was “priced to perfection”. But at the time CMG was the hottest stock around. |
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| Earnings Table | ||
 Last quarter, Chipotle had 19% profit growth on an 18% increase in sales. That’s still solid.The stock missed estimates by 3 cents, after beating by 26 cents the quarter before. This miss hurt the stock. Annual Profit Estimates declined across the board. Quarterly estimates dropped a lot, now mid-teens growth is expected the next four quarters. |
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| Fair Value | ||
 My Fair Value P/E has dropped from 35 to 30 and now 25 the past three qtrs. Stock’s selling around where it should now. There’s good long-term appeal. |
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| Ten-Year Chart | ||
 CMG made a parabolic move higher and I took profits along the way — but should have sold-out the entire position around $400. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
16 of 16 |
Chipotle has fallen but has been showing signs of life the past two weeks. The trend has turned up. Still, I think CMG is around were is should be and holds little short-term appeal. I like the stock for the long-term. CMG is ranked 16th of 16 stocks in the Growth Portfolio Power Rankings. Its not fit for the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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