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 Chipotle, 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.
Time to pile on (rats falling from the ceiling!): https://www.bloomberg.com/news/articles/2017-10-25/ackman-s-lost-a-lot-of-queso-on-his-stake-in-chipotle
An interesting article on the struggle within the turnaround efforts.
“Every chain restaurant, he says, goes through this rite of passage. For every success like Starbucks, there are former high-flyers like Baja Fresh and Boston Market that no longer have cultural currency and are slowly fading.
Moran (Chipotle founder) remains confident that Chipotle will not end up an afterthought dotting the strip malls of America, but he preaches patience. “Will we climb out of it and get back to our former greatness? I absolutely believe we will,” he told me in June. “But will that take a year or two or three or four? I don’t know. The full recovery from this is going to take a long time.” https://www.fastcompany.com/3064068/chipotle-eats-itself