CMG: Tasty Short?

Zachstocks published a piece on Chipotle Mexican Grill right after they released earnings, expressing caution towards the company's performance going forward, and its already-rich value.

I take interest as I always wanted to short CMG back in its pre-$100 days, but shares were impossible to borrow. I'm not sure whether or not it's actually feasable to short now... but it may be worth a look. If the general market weakens, watch for the bloated CMG to lead the decline.

Read the full article "Chipotle Earnings - CMG Getting Heavy" at Zachstocks.


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Do Not Buy Retailers, Part 2

Zachs.com published an article at Seeking Alpha discussing overall weakness in the retail sector.

Zachs calls out Abercrombie (ANF) and Target (TGT) by name for having weak comparable-store sales figures - ANF's dropped 28% vs. year ago numbers, while Target's fell 6%. They also pointed out that Wal-mart (WMT) elected to NOT report comps for the first time in 30 years. That doesn't necessarily mean trouble for WMT, but it's an indication of the immense pressure of retailers to maintain sales, beat Wall Street estimates, or suffer the consequences.

Read the full article here at Seeking Alpha.

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Do Not Buy Retailers

Zachstocks recently posted a piece on the numerous opportunities for initiating short positions in the consumer discretionary/retail sector.

The author discussed the macroeconomic factors causing weakness (consumer and economic uncertainty, etc.) and then adds commentary on specific stocks that may be poised to fall. He mentions Tiffany (TIF), Chipotle Mexican Grill (CMG) and Green Mountain Coffee Roasters (GMCR).

Head on over to Zachstocks to read the full article: "Retail Stocks Appear Ready to Fail"


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Barrons, FBR Advise Against First Solar; Shares Fall

Barrons wrote about First Solar's weaknesses and competitive threats this weekend (Reuters coverage of Barron's commentary here), and an analyst, FBR Capital Markets, followed up Barron's with a downgrade on Tuesday morning.

The FBR analyst, who slapped an "underperform" rating on FSLR, mused that "recent checks indicate at least one of First Solar's top customers has already switched from First Solar to a silicon-based module vendor for a project that is currently under construction."

The Yahoo! article covering the analyst downgrade elaborated. "Hosseini noted that FBR's meeting with the KfW Bank Group, a Frankfurt-based development bank that lends especially to economic, social and ecological projects internationally, revealed that its year-to-date photovoltaic project backlog has shifted dramatically toward silicon-based modules compared with its 2008 thin-film-focused mix."

I have previously drawn similar conclusions on this blog and on Student Stocks. First Solar is a company that is ALREADY overvalued even before considering the significant, growing competition that they face from both silicon-panel makers and thin-film outfits. Though the share price unfortunately increased after my last article, I made (real) money in the past shorting FSLR from $280 to $140. Though shares have fallen $20 (10%) since the Barrons and FBR pieces, shares still should have plenty of downside room. I tried to short FSLR a few weeks ago (shares were at levels similar to today's price) but none were available.

I continue to dislike FSLR shares at this price, in this environment. I'd never go long, and I will be considering initiating a short position.


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Yet Another "Short Treasurys" Article

At Seeking Alpha, the contributor Market Folly published an article about a successful, well-respected Hedge Fund manager recently voicing his opinion that investing in Treasurys is now "foolish."

Read "Michael Steinhardt: 'Investing in Treasuries Now is Foolish' " at Seeking Alpha.

-SF


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Amazon Short-Call Follow Up

Though I myself didn't short shares of Amazon.com (AMZN) despite all of my recent negatively-slanted pieces, I am glad to report that shares are sitting lower than they were on every date that I published anything about them.

AMZN's recent decline can be attributed to the general market pullback, but looking forward, shares may continue to underperform. Below is a six month chart of AMZN:

Shares are still trading at $75 though the company is only expected to earn roughly $2/share next year. Even a 50% upward surprise (meaning yearly earnings of $3/share) still wouldn't make shares look cheap.

Looking at the chart, shares seemed to touch resistance (both 50 day moving average and some previous lows) today, so further movement downward could be looked at as a weak technical sign. Shares have also clearly broken the upward trend that began in march. Looking downward, there had previously been consolidation between $60 and $65, which could be a reasonable mid-term price if the wider market continues to correct. There's still a glaring gap between $50 and $57, but I wouldn't expect that to be filled anytime soon.

The bottom line, once again, is that Amazon is a great company but AMZN shares are still overvalued. I'm personally not initiating any short position at this point, but I'd rather short than buy long AMZN shares tomorrow.

And as always, if you're in the market for one of Amazon's new Kindle readers, please do through so my link below.

Buy a Kindle 2, Kindle DX, or anything else at Amazon.

Is it Time to Short Treasurys?

Seeking Alpha contributor Larry McDonald thinks so.

Many market analysts and observers have been screaming to short Treasurys for months as rates have hovered near all-time lows. Even Warren Buffet has now acknowledged that the current treasury situation appears to be bubble-like.

I agree that the current Treasury bond environment is unsustainable, but "when" is the key unknown. I was early when I called for an oil-bubble implosion, and I have also been early on shorting stocks like FSLR and CMG. But yields for Treasurys can't really get much lower, so it seems like downside risk for the shorting instruments (TBT) might be more limited.

The article is worth a read, and you can check it out here:
Read "Rising Treasury Yields Could Mean Its Time to Short Them" at Seeking Alpha.