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Chipotle Mexican Grill, Inc. Message Board

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  • fy_do fy_do Nov 3, 2011 8:24 PM Flag

    Barrons putting CMG in NFLX league

    Repeat: CMG's moneyflow today was OUT..negative chart. And so were its momentum, MACD and low volume

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    • It was GREAT. I sold my DITM puts @$325 yesterday and bought OOM puts. I bought OOM puts because I had a feeling they'd pull this crap (runup on low volume to distribute from a higher base). I marked to the money after letting it run to $335.

      Granted, it isn't for the faint of heart, but I have plenty of powder dry and am in this for the long haul. I really like that article that on CMG's valuation from a fundamental point of view.

      ***************
      http://www.investorplace.com/2011/10/cmgscreaming-short-chipotle-mexican-grill/

      Let’s put it in other terms. The value of each individual McDonald’s (NYSE:MCD) restaurant in relation to the company’s market cap is about $2.87 million.

      Family members who own stores tell me it takes about $1.4 million to build a restaurant from scratch, so a mature store would be worth double that. Chipotle stores cost roughly the same to build, but even if they cost twice as much, the present value of an individual Chipotle restaurant is $9.47 million. There’s no way that makes sense!
      *************

      Relative valuation per store gives you a pretty good sense of how far this has to fall. McDonald's is best in breed in terms of store profitability. CMG is likely to lose more than half of its value over the next 2 years as the story fades...

      • 1 Reply to techstrategy
      • good summary...

        These locations are NOT worth 4 to 6 times a McDonalds location ... no way .

        We'll be dumping more at the open and riding her down to the low 200's , mid 100's and we'll dump the final batch that we shorted at 347 when she returns to 80 .

        SHould be a great trader for a while though since they seem to be able to prop her up even while the CEO and the top Hedgies are dumping millions worth ... amazing power to keep the dead dancing .

 
CMG
598.49-2.12(-0.35%)Jul 11 4:02 PMEDT

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