24 {{ upvoteCount | shortNum }}
24 {{ upvoteCount | shortNum }}

Chipotle stock troubles might make many people MILLIONAIRES

by writeaway
24 replies
  • OFF TOPIC
    • |
If you've been reading the news lately, you KNOW that the company behind the Chipotle Restaurant chain is in trouble due to e. coli issues.

See Chipotle stock plunges again on new E. coli fears - Dec. 22, 2015

This is bad news for the company's stock.

What you probably OVERLOOKED is the FACT that Chipotle is one of the MOST SOLID restaurant chains out there in terms of overall value and growth.

Translation: Buying this company's stock NOW might lead to nice returns if the company recovers from its recent spate of bad publicity.

DISCLAIMER: I don't own any Chipotle stock nor am I getting paid to post this. However, I AM thinking of buying in after I do more research regarding the company's fundamentals. So far, I like what I have seen.
  • Profile picture of the author butters
    Originally Posted by writeaway View Post

    If you've been reading the news lately, you KNOW that the company behind the Chipotle Restaurant chain is in trouble due to e. coli issues.

    See Chipotle stock plunges again on new E. coli fears - Dec. 22, 2015

    This is bad news for the company's stock.

    What you probably OVERLOOKED is the FACT that Chipotle is one of the MOST SOLID restaurant chains out there in terms of overall value and growth.

    Translation: Buying this company's stock NOW might lead to nice returns if the company recovers from its recent spate of bad publicity.

    DISCLAIMER: I don't own any Chipotle stock nor am I getting paid to post this. However, I AM thinking of buying in after I do more research regarding the company's fundamentals. So far, I like what I have seen.
    Kinda seems like BP after the oil spill, all depends how long your willing to wait to get your money back out and at $500-$400 it isn't cheap.
    {{ DiscussionBoard.errors[10452124].message }}
    • Profile picture of the author writeaway
      Originally Posted by butters View Post

      Kinda seems like BP after the oil spill, all depends how long your willing to wait to get your money back out and at $500-$400 it isn't cheap.
      Look at its 6month chart.

      It will make your jaw drop.

      This stock is 250 points below its peak.

      Sure, $500 is a lot of money but it sure is way cheaper than $750

      Also, American eating habits are changing and Chipotle and similar chains seem to have a lock on this trend.
      Signature
      {{ DiscussionBoard.errors[10452131].message }}
      • Profile picture of the author whateverpedia
        Originally Posted by writeaway View Post

        Also, American eating habits are changing and Chipotle and similar chains seem to have a lock on this trend.
        Serving people E. Coli is hardly what I'd call a lock on any trend. I also doubt whether American tastes in food have changed enough to eat at a restaurant with issues like that.
        Signature
        Why do garden gnomes smell so bad?
        So that blind people can hate them as well.
        {{ DiscussionBoard.errors[10452142].message }}
        • Profile picture of the author writeaway
          Originally Posted by whateverpedia View Post

          Serving people E. Coli is hardly what I'd call a lock on any trend. I also doubt whether American tastes in food have changed enough to eat at a restaurant with issues like that.
          Apparently, you haven't been studying McDonalds and related stocks. It's a mess.

          There's definitely a shift towards the segment dominated by Chipotle.

          This recent spate of bad news might actually be GOOD NEWS for value investors.

          I'll probably wait on the sidelines though.

          If this stock drops some more AND its same store sales perk up, that might be the paired signal that would get me off the fence
          Signature
          {{ DiscussionBoard.errors[10452146].message }}
  • Profile picture of the author whateverpedia
    Originally Posted by writeaway View Post

    Translation: Buying this company's stock NOW might lead to nice returns if the company recovers from its recent spate of bad management
    The changes I made were necessary.
    Signature
    Why do garden gnomes smell so bad?
    So that blind people can hate them as well.
    {{ DiscussionBoard.errors[10452130].message }}
  • Profile picture of the author seasoned
    If I could go without food, I WOULD! I swear, the mentality in the food industry STINKS! One person recently made a mistake at a drive through. In return, je gave me my entire order FOR FREE! I saw the server, lost my appetite, and do you know what I did ASAP? I threw ALL that stuff OUT!!!!!!

    As for chipotle, and management, it is BAAAAAD! They have closed stores in MANY states! I had heard that people DIED, but STILL.... CDC Update: Chipotle-Linked E. Coli Outbreak Case Count Now At 52 | Food Safety News

    There is only ONE way you can get Ecoli. And it is just OBSCENE.

    It is a pity. Chipotle had a nice concept and a nice name, but there is a lot wrong with it, and ecoli is about the worst disease they could hope for.

    Steve
    {{ DiscussionBoard.errors[10452198].message }}
    • Profile picture of the author butters
      Originally Posted by seasoned View Post


      It is a pity. Chipotle had a nice concept and a nice name, but there is a lot wrong with it, and ecoli is about the worst disease they could hope for.

      Steve
      Dunno, according to the other thread, cancer seems worse.
      {{ DiscussionBoard.errors[10452205].message }}
      • Profile picture of the author seasoned
        Originally Posted by butters View Post

        Dunno, according to the other thread, cancer seems worse.
        PLEASE name ONE cancer that can be caused by eating a food that is caused by an INCREDIBLY negligent care that should cause the ENTIRE ENTERPRISE to be SHUT DOWN!

        Ecoli isn't bad because it is bad. It is bad because it creates so much harm due to an extreme lack of care.

        Steve
        {{ DiscussionBoard.errors[10452463].message }}
        • Profile picture of the author butters
          Originally Posted by seasoned View Post

          PLEASE name ONE cancer that can be caused by eating a food that is caused by an INCREDIBLY negligent care that should cause the ENTIRE ENTERPRISE to be SHUT DOWN!

          Ecoli isn't bad because it is bad. It is bad because it creates so much harm due to an extreme lack of care.

          Steve


          You missed the sarcasm in my post... But... Since you asked. E. Coli carries genes which are able to damage DNA which would then potentially lead to cancer. A quick Google search linked me to several articles in which cancer and E. Coli have been linked. Just saying.
          {{ DiscussionBoard.errors[10453066].message }}
    • Profile picture of the author Kay King
      With the downgrade, that stock will probably go lower - but I agree it could be a good buy in the long run. We've eaten there twice in the past 2 weeks - not worried about it.

      The response of the restaurant chain:

      https://www.chipotle.com/update
      Signature
      Saving one dog will not change the world - but the world changes forever for that one dog
      ***
      Live life like someone left the gate open
      {{ DiscussionBoard.errors[10452223].message }}
      • Profile picture of the author writeaway
        Originally Posted by Kay King View Post

        With the downgrade, that stock will probably go lower - but I agree it could be a good buy in the long run. We've eaten there twice in the past 2 weeks - not worried about it.

        The response of the restaurant chain:

        https://www.chipotle.com/update
        Considering the fact that many financial analysts suffer from herd mentality, I suspect there will be more downgrades.

        My personal target for this stock is in the 200 to 300ish range.

        Watch the same store sales figures and costs.

        If everything holds up and the bad news and the e.coli issue is resolved, expect a nice pop up.
        Signature
        {{ DiscussionBoard.errors[10452234].message }}
  • Profile picture of the author Synnuh
    If it hits $200 a share I'm all in lol -- I'm watching it and may jump in if it hits $400

    Chipotle isn't going bankrupt over this. Thanks for the heads up ;D

    Do you know what happened in July 2015 that kicked it up so high?
    {{ DiscussionBoard.errors[10452243].message }}
  • Profile picture of the author yukon
    Banned
    There's no way I would bet on a food business with e coli outbreaks. This type of bad news can bankrupt a business.
    {{ DiscussionBoard.errors[10452249].message }}
  • Profile picture of the author Synnuh
    Most businesses would crumble under this type of pressure.

    Chipotle still has a $16,000,000,000 market cap, though -- that's not going to just disappear overnight.

    The execs at the helm have come up with a plan to recover and are working with the CDC and independent investigators to figure out the source. They've already switched up suppliers for the food they believe caused the illness.

    I don't see them going bankrupt.

    Remember Jack In The Crack (er, Box) in the 90's? Their E.Coli outbreak was 3 times as big as Chipotle's and they're still going strong -- even with nasty ass food. They didn't have near the market cap to weather this type of storm and still came back.

    4 people actually died during that outbreak. https://en.wikipedia.org/wiki/1993_J..._coli_outbreak
    {{ DiscussionBoard.errors[10452266].message }}
    • Profile picture of the author yukon
      Banned
      Originally Posted by Synnuh View Post

      Most businesses would crumble under this type of pressure.

      Chipotle still has a $16,000,000,000 market cap, though -- that's not going to just disappear overnight.

      The execs at the helm have come up with a plan to recover and are working with the CDC and independent investigators to figure out the source. They've already switched up suppliers for the food they believe caused the illness.

      I don't see them going bankrupt.

      Remember Jack In The Crack (er, Box) in the 90's? Their E.Coli outbreak was 3 times as big as Chipotle's and they're still going strong -- even with nasty ass food. They didn't have near the market cap to weather this type of storm and still came back.

      4 people actually died during that outbreak. https://en.wikipedia.org/wiki/1993_J..._coli_outbreak

      That's the problem, two outbreaks & still no clue where they went wrong (employees, vendors, transportation for food, etc...).

      Chipotle is down -24% for the year, down -6% over 2 years. Not impressive at all.

      Involving the CDC in any food business is bad news. I'd avoid Chipotle like the plague (no pun intended).
      {{ DiscussionBoard.errors[10452294].message }}
      • Profile picture of the author writeaway
        Originally Posted by yukon View Post


        Involving the CDC in any food business is bad news. I'd avoid Chipotle like the plague (no pun intended).
        If that is the case, why not SHORT the stock?
        Signature
        {{ DiscussionBoard.errors[10452298].message }}
        • Profile picture of the author yukon
          Banned
          Originally Posted by writeaway View Post

          If that is the case, why not SHORT the stock?
          Go for it, it's not done dropping in price.



          Inside Chipotle's Contamination Crisis
          Smugness and happy talk about sustainability aren't working anymore.
          {{ DiscussionBoard.errors[10452306].message }}
      • Profile picture of the author Synnuh
        Originally Posted by yukon View Post

        That's the problem, two outbreaks & still no clue where they went wrong (employees, vendors, transportation for food, etc...).

        Chipotle is down -24% for the year, down -6% over 2 years. Not impressive at all.

        Involving the CDC in any food business is bad news. I'd avoid Chipotle like the plague (no pun intended).
        It can keep dropping. The more, the better.

        It may never return to the $700+ per share, but if it does, indeed, hit $200 a share, you can guarantee it won't stay there. There's already too much money tied into that machine for it to go bankrupt.
        {{ DiscussionBoard.errors[10452368].message }}
        • Profile picture of the author yukon
          Banned
          Originally Posted by Synnuh View Post

          It can keep dropping. The more, the better.

          It may never return to the $700+ per share, but if it does, indeed, hit $200 a share, you can guarantee it won't stay there. There's already too much money tied into that machine for it to go bankrupt.

          Ha, ha, no company is ever too big to not go bankrupt.
          {{ DiscussionBoard.errors[10452917].message }}
  • Profile picture of the author whateverpedia
    Just been doing a bit of mental arithmetic. With a stock price still so high you'd need to buy an awful lot of shares to become a millionaire from it. In fact so many you'd need to be a millionaire in the first place tp buy them.
    Signature
    Why do garden gnomes smell so bad?
    So that blind people can hate them as well.
    {{ DiscussionBoard.errors[10452503].message }}
    • Profile picture of the author writeaway
      Originally Posted by whateverpedia View Post

      Just been doing a bit of mental arithmetic. With a stock price still so high you'd need to buy an awful lot of shares to become a millionaire from it. In fact so many you'd need to be a millionaire in the first place tp buy them.
      Think Margin trading.
      Signature
      {{ DiscussionBoard.errors[10452840].message }}
    • Profile picture of the author yukon
      Banned
      Originally Posted by whateverpedia View Post

      Just been doing a bit of mental arithmetic. With a stock price still so high you'd need to buy an awful lot of shares to become a millionaire from it. In fact so many you'd need to be a millionaire in the first place tp buy them.

      You don't have to buy full shares of a stock.

      You can buy fractions of a stock from Sharebuilder (bought out by Capital One Investing) & bank on the percentages. Assuming you're in a stock long term.

      My point is, the dollar amount on a stock isn't what you should be looking at for stocks, it's the percentage (+/-) where the money is made/lost.

      Example, you could have a $500 stock with a measly +1% YTD increase while a $50 stock with a +100%YTD increase would be way more profitable. Would you rather have your money increase +1% or +100%? I'll take the +100%.
      {{ DiscussionBoard.errors[10452942].message }}
  • Profile picture of the author agc
    Chipotle
    {{ DiscussionBoard.errors[10453778].message }}
    • Profile picture of the author writeaway
      Originally Posted by agc View Post

      It'll bounce back.... Just wait for the bottom. Nowhere near the worst level yet.

      I suspect the analyst herd mentality will kick in and the 'neutral' or even 'sell' recommendations start to hit a critical mass.
      Signature
      {{ DiscussionBoard.errors[10453986].message }}

Trending Topics