Time to Buy Chipotle Stock?
Good day members,
I guess what they say about Mexican food is true. Always be near a bathroom if you plan on attending a Taco Tuesday event. As we’re sure you’ve already heard, dozens upon dozens of Chipotle Mexican Grill customers got very sick from an E. Coli outbreak and a separate Norovirus incident. Dozens of stores across the Northwest (and a location in the Boston area) had been shuttered for cleaning.
This was obviously very bad news for CMG investors.
The stock went from over $700 a share before the outbreak, subsequently crashing to its current $550 range.
This, is great news for us!
It offers us another “crisis opportunity” to buy a great company for “cheap.” The last crisis opportunity we had was with Volkswagen (VLKAY) when we discussed buying stock in the $25 per share area… now it’s up about 20% from then! (please visit www.caesarsfinancial.com to read our article on Volkswagen).
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This brings us to our new crisis opportunity with CMG. Have a look at the chart below.
That cliff dive in mid-to-late October occurred as news of the E. coli outbreak hit. The stock has tanked to a point now that it looks very attractive as a buy. Late last week we were considering alerting CMG to our readers. However, we (thankfully) held firm and decided to alert today instead.
Like Volkswagen, don’t be surprised to see CMG stock up 20% in the coming weeks as loyal customers flood back into their doors.
While the company has said earnings for the current quarter will be strongly affected by the events, its times like these that give us opportunity to buy. Keep looking ahead!
Here’s more from our friends at CNN Money: “Chipotle warned in an SEC filing after the closing bell Friday that same-store sales may plunge as much as 11% and profits could fall 26% in the fourth quarter because of an E. coli outbreak that appears to have its roots at the popular Mexican food chain.
Shares of Chipotle (CMG) tumbled as much as 8% in early morning trading Monday on the news before recovering a bit. The Stock fell further following a report that some Boston College athletes became sick after eating Chipotle surfaced. Shares were down 6% in premarket trading on Tuesday.
At least 13 Wall Street analysts cut their price target on the stock Friday or Monday morning, according to FactSet Research.” Read more HERE
Have a great week!
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