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

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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Do Not Buy Chipotle Mexican Grill

How's this for a nice throwback - Short Chipotle Mexican Grill (CMG).

On my other blog, I wrote plenty about CMG's ridiculous valuation in late 2007 and early 2008. I was never actually able to short CMG shares, as I could never find any available, but that was ok - my initial call on October 31, 2007 was a bit early, and I would have probably covered as shares rose from $130 to $150. However, my thesis was eventually vindicated as shares fell from $150 to about $40 over the course of 2008.

Now shares have recovered back to about $80, and armchair analysts are once again labeling CMG shares as too expensive. Though company results have been impressive over the past few quarters, there appear to be some cracks under the surface that will cause a slip-up going forward.

Two article below are worth reading: The first, at Zachstocks, is a general overview on the bearish CMG case. The second is another piece at Seeking Alpha about recent insider sales of CMG shares.

Read the article "Chipotle - A Tasty Short Opportunity" at Zachstocks.
Read "Why are Insiders Losing their Taste for Chipotle" at Seeking Alpha.