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Chipotle sales nosedive, stock falls


I’ve heard the trite phrase, “The trend is your friend…”.  Well, that works, until it doesn’t.  Chipotle was sporting over a 35 P/E back when the stock price was at 700.  The stock price is now around 425, and has a 30 P/E, because the earnings have precipitously dropped.  Value investing looks at a decent multiple for a good business, and 30 is just ridiculous for a restaurant.  Once it gets down to 15, it will be worth looking at, because I believe Chipotle will overcome.  The bacteria breakouts will be a distant memory in a couple of years, so this is one to keep on the radar, and wait for a stock price in the 200s.  While that will be 3 times book value, Chipotle has a following that should keep it afloat for decades to come.

Chipotle (CMG), which has fallen from darling status after an E. Coli and norovirus food-safety crisis last year, dropped after reporting first quarter earnings after the bell on Tuesday

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