Skip to comments.Chipotle Mexican Grill, Inc. (NYSE:CMG)
Posted on 07/21/2012 3:51:29 PM PDT by Cplus
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Probably Chipotle had a lot of trouble making money when they were forced to give up illegals and had to hire American citizens.
Then, too, it was wildly over-priced relative to the earnings growth that was reported. CMG was a roller coaster waiting to drop.
Ever heard of Boston Chicken, Snapple, Krispy Kreme? Guess what, THE VERY SAME THING HAPPENED TO THEM: the mo-mo boys ran them up to the sky, relative to actual hard-dollar value, then they missed earnings or revenues targets, then ... blooey. Food and food service stocks and restaurant chains can only become bid SO high, and then, speaking both practically AND historically, look out below! Where have you been, laddiebuck?
Note to traders: Chipotle shares will likely rally in the short term, but they've a devil of a lot further to fall. I would strongly suggest looking at buying long-term put options, more or less at-the-money, on any rally.
Good trading to everyone!
There is still $100-plus to the downside, but there will very likely be vicious short-term rallies in the near term. "Momentum", or whatever the Street is calling it these days, is NOT a permanent feature of ANY share price, ever.
I’m surprised they lasted as long as they did.
It only took one visit for me to swear off Chipolte forever, after paying top dollar for a terrible burrito that consisted of a tortilla filled with rice that was it for me.
But living in Arizona, i don’t have to put up with overpriced crap whose only resemblance to real Mexican food is that it’s rolled up in a tortilla. I guess most of the rest of the country doesn’t have any better options than the faux-Mexican garbage that Chipolte sells.
That is what happens when you offer up an overpriced yuppie version of Mexican food......
Great minds......I’m in Texas....
Restaurant-chain stocks always do this. They grow to the sky and then crash. The restaurants get old, there are few barriers to entry, and new competitors come along.
You want good stocks that don’t crash, pick industries which are hard for new competitors to enter. Oils, utilities, cigarettes.
This sounds like one Obama built.
Ditto that! Once was enough for me also.
I went to one in Alexandria VA that was packed, but they don't seem to have any good Mexican food there.
Unfortunately, some of the best taquerias around here have closed down since GA passed our illegal immigration law and our construction industry took a dive.
“Restaurant-chain stocks always do this. They grow to the sky and then crash.”
Well put. That’s why I never buy restaurant stocks. The majority of my BUYS are long-term holds.
Thanks for mentioning Krispy Kreme and ruining my weekend. lol!
That's quite a stretch to explain a drop in a stock price.
Here in NM, I had 2 carne asada tacos yesterday (at my awesome little dive mex restaurant) that filled me up for the whole day and cost less than $6. Fortunately, the restaurant didn’t have waterfalls and live mariachi music and I am the winner in that deal.
It is tough to compete with these little Mexican joints that are good. You need to be so much better and that is hard to do.
How do you pronounce “Chipotle?”
The guy started in a little store near Denver University..
Taco Cabana is pretty good...
Their guacamole is too kill for...
“I guess most of the rest of the country doesnt have any better options than the faux-Mexican garbage that Chipolte sells.”
Aucontraire! Atlanta has some darn good authentic food.
Hope Chipotle crashes and burns. Remember this from 2011”
“Workers at Chipotle restaurants across the country might be making a run for the border soon.
The Mexican food chain, which serves gut-busting burritos, tacos and tortilla-less burrito bowls in nearly 1,100 locations across the U.S., fired hundreds of workers in Minnesota recently amid a probe by immigration authorities.
The workers were let go after an audit by the U.S. Immigration and Customs Enforcement Agency (ICE) revealed that workers at some of the 50 restaurants across the state had turned in phony-looking I-9 forms, which verify that a worker is eligible to work in the U.S.”
“It is tough to compete with these little Mexican joints that are good.”
You can usually tell a good Mx restaurant if the English speaking patrons (as their obvious first language) are far outnumbered by the non-English speaking patrons. That type of restaurant is usually good AND cheap.
(How was that for being PC?)
I read what I thought was a well reasoned business article suggesting that so called ‘fast casual’ restaurants were a good buy. Chipotle was mentioned by name. The theory was there are a lot of young adults who can’t cook and have little income, but want better than typical fast food fare, like McD’s. It seemed reasonable to me and I put Chipotle on my buy list and then forgot to make a buy. Good luck!
Too bad. Their food is actually pretty good and you get a huge amount of meat in the dishes. And it’s very Mexican...the dish isn’t spicy, but you can put a wide variety of sauces or toppings onto it that will make it the way you want it.
They started as a small operation somewhere (Chicago ?) and the were bought by McDonald’s and then let go,IIRC.
I don’t speak PC, so I understand you comments perfectly :-)
Point well taken.
Are you presently in the ABQ area? I was wondering which restaurant you like there. We had a few favorites when we lived there.
Your profile shows you in Idaho. Did you move recently?
Could be because their food sucks.
Could be because their food sucks.
Yeah, I am in NM now.
My 2 little favorites are Federico’s and Cazuala’s both near Intel.
I like Chipotle but when we eat there it's easily forty bucks. WTH? Burritos used to be big and cheap.
Everybody's food sucks. I haven't see one restaurant posted on this site that at least half the people didn't think their food sucked.
I’ve spent quite a bit of time in Mexico, and some in So. Texas too, and the best Mexican food is always found in the cheaper places. We have some resturants in D.C. that serve Mexican food just as you might find it in respectable resturants in Mexico City, and to me it seems greasy and heavy. OTOH, every now and then, you’ll find a dive bar or little carry out that offers outstanding Mexican fare, just like in some cocina econmóica south of the border.
After the (frankly) awful quarterly report that came out Thursday, the game is over. The only variable remaining is just how long it takes CMG to return to earth. Me? I want to buy long-dated puts on the reaction rally that we'll likely see next week.
Good trading to you!
We don’t eat out a lot but lately it seems as if there are more and more places we choose not to return to because their food just doesn’t taste like it used to. I have flatly refused to eat at anything Mexican for years. We did discover a relatively new restaurant not far from us though that has awesome hot roast beef sandwiches and great meatloaf which is now our only go to place. Nice to see a restaurant that offers American food and is not among the at least 50 hamburger, shake and fry places around.
If you like Chipotle, you may also like “Freebirds” which actually preceded Chipotle, but hasn’t grown nearly as much.
Mainly located in California and Texas.
Federico’s I remember, but Cazuala’s must be (relatively) new.
Cazuala’s is 3 years old I think. It is on Sara rd. just east of 528 (first light you come to). It is good. It is a bit nicer in terms of dining than Federico’s is.
Chipotle is ANTI-GUN
When AZ allowed CCW holders to carry in establishments which serve alcoholic beverages, CBG posted No Weaons signs in accordance with that law.
I refuse to eat in gun free zones. We know how safe such places are, to wit: Aurora, CO. My pastor and church friends and some coworkers may have been discouraged when I told them.. This may have reduced business in gun-friendly AZ.. Cant say about the rest of the nation.
“Ever heard of Boston Chicken, Snapple, Krispy Kreme? Guess what, THE VERY SAME THING HAPPENED TO THEM: the mo-mo boys ran them up to the sky, relative to actual hard-dollar value, then they missed earnings or revenues targets, then ... blooey.”
I’d short Five Guys tomorrow, but they’re private. They’re saturating markets, now going toe-to-toe with In-and-Out and think that their overpriced burgers will somehow win. They’d have their hands full just keeping up with McDonald’s, but no - they think they pull this stunt off. They remind me very much of People’s Express.
A few notes about Mexican food. To start with, Mexico has a lot of different cuisines, but what Americans think of when they think Mexican food is called “Sonoran”.
Sonora is just the most northwestern state in Mexico, not including the two states of Baja. It has a border almost unique to Arizona. New Mexico and Texas border other Mexican states.
But it’s even more specialized than that. In effect, it could be called “inland Sonora”, because the cuisine along the West coast of Mexico is very heavily seafood oriented, and very different than what you think of when you think of Mexican food.
In Mexico, most food is cooked in lard, not vegetable oil, which is preferred in the US. So “authentic” Sonoran Mexican is considerably richer in taste. They also use Crema Agría (Mexican sour cream), which is somewhat stronger than sour cream and made from whole milk.
Queso Blanco (cheese) is also a very popular ingredient, but not cheddar. Hand made tortillas are usually better.
Mexican beef is often shredded instead of ground, and they prefer different cuts to their beef, like skirt steaks.
And what we have here in Texas (TexMex) is different depending on what part of the state you're in. Down here in the Houston area they use alot of chili gravy. Up in North Central (DFW area) chili con carne is prevalent. That's not even getting into the differences between states. New Mexico's idea of Mexican food is totally different from Texas!
If you’re ever in the DFW area try El Fenix or Pulido’s. El Fenix has chips and picante that’s hard to beat!
Most Mexican food in Mexico isn’t that good, and it’s over-priced.
Back in my wild days we had to shoot our way out of two donkey-bar Tijuana joints who insisted we leave an obscene tip.
Good Mexican food can only be eaten and enjoyed with a .357 strapped to your hip.
Not to overlook Oaxaca, which is home to one of the world’s great cuisines.
Oaxaca cooking is becoming better known in California where there are a number of food trucks in Northern California and LA that post their weekly scheduled locations on line and have crowds lined up waiting for them at lunch.
And one lady proprietor of a Michelin multi-starred restaurant from Oaxaca relocated her restaurant to Austin. While waiting for her license, she too operated as a food truck
People’ Express, like Freddy Laker’s airline but to a lesser extent, also took it in the chops because of the gyrations of the forex mkt in 1985-87. Five Guys? No idea. They were not in my home town when I moved out of the US. I’ve no reason to think you’re wrong, though — premium-priced fast food is NOT a long-term winning business plan (as our fiends [no typo] at Chipotle are just about to learn, the hard way).