This is a good point. If sales plummet along with gas prices and tesla goes Chapter 11 you can't return your Tesla with this guarantee. Musk does need to personally guarantee this. Things in these momentum stocks can change very fast especially in the car industry. They will be spending like a drunken sailor on the gigafactory and if wall street says sorry no more money from us and if musk can't get more free money fromn the US taxpayer things go south fast I think
But wait..there's more! BMW service is FREE for 4 years. Everything. Tesla is $400 to $600 per year. There goes half the savings that was left as this is $50/month more for the Tesla vs any BMW
You are 100% correct. That was my target based on the rational PE versus the insane momentum valuation traders were giving it. I didn't chage it in the 600's thankfully. Instead I wrote short PUTS with strikes from 540 down to 480 with premiums of around 50 each putting my cost if I was PUT the stock around that 450 level.
The stock was insane trading at these valuations and even though CMG traded high in the past this was by far the highest ever. It had to come down and we'll see multiples compress painfully for the longs.
If comp's are 5% next year plus 10% store growth you get 15%. Add small premium and you get a PE of 20 to 25 so fair value is really 400 to 500 which is why I pegged the midpoint at 450 for my PUTS. I think this stock trades into the 400's just not sure if the low or high range of it. Another 100 plus points of pain for the longs coming.
The total payout they just said was the same. So instead of giving shares and diluting they are giving cold hard cash to the executives. How does that help shareholders????????
The drop is not rational as many market moves are not. The forward PE on Coach is now lower by a few points then KORS. Even if KORS growth dropped 2/3 of where it is the company would STILL be growing and quite fast still. Compare to COH which is still shrinking yet valued higher than KORS?
In summary. there is no rational reason. On a comparable basis and even standing alone KORS is wildly undervalued. May be the technical/chart traders dumping because it passed some trendline or whatever. Stock fair price is over 100.
Bide your time and when it falls 25% then short it. At that point the longs and momo guys will be bailing hard and you can make money on the downside. GPRO is just the annointed momentum flavor of the day. It will get old and traders will move on to the next belle of the ball
Exactly. But my post was about the analysts making it sound like Apple Pay itself was a revenue driver as in people use it and apple will get paid so much on the transactions that it makes any difference. It doesn't as my analysis shows. The point was that the analysts are all dumb MBA's getting paid for shoddy work.
Why would banks and visa/mc give them the entire 1.5% made on transactions and keep zero for themselves. Your statement is absurd.
Ok, either Wall street is beyond dumb or I am going nuts. analysts talking about apple pay like it could have any material affect on apple's numbers.
Apple reported for Apple pay it rakes 15 cents out of every $100. On $100 billion in transactions apple only makes $150 million! LOL.
So this is really bad then. Out of a trillion dollars in transactions or about 1/15th of the entire GPD apple makes $1.5 billion. this doesn't move the needle at all. (BTW apple won't be hitting a trillion for 10 years or more and maybe never).
You could make the assumption more devices will be sold or less churn but modeling in Apple Pay revenue is nuts. Apple had almost 200B in revenue and 60B in EBITDA. It will take them 5 to 10 years to get to a trillion in transactional volume for Apple Pay, if they even get there. I think they will be lucky to see 500B in transactions in a decade.
100% of all visa and mc transactions worldwide this year is around 5 or 6 trillion. Even if every iphone user used apple pay they are about 15% of the smartphone market meaning just under a trillion dollars in transactions. This assumes every iphone user uses apple pay for every single transaction (they can't because only 2% of the worlds terminals are NFC ready still). Also Apple won't have 100% penetration of NFC phones for half a decade or more.
I listen to these MBA analysts on CNBC and am blown away they can't figure this #$%$ out? #$%$! How did they get these jobs? Is my math wrong????
As predicted by Cramer (gotta give him this one) the funds are now selling off FB so they can get loaded up on Alibaba. FB is being used as a source of funds as is Tesla and a few others. Good chance to load up on FB while the foolish funds play the games.
Very true and this is also what lets fundamental investors with a longer term outlook get an edge on the market and pickup bargains. I'm thankful for the insane day traders and chartists who don't care about what a company does or the financials. That irrationality allows one to destroy the market
Yes agreed but nobody knows when the sentiment shift will happen on the overly generous valuation and bring it down. Could be today, tomorrow, weeks, months or longer. This stock is trading at its highest PE ever now.
Your price range is a bit high too. 450 plus/minus 25 points is about fair value. There will be a massive correction at the first hint of slowdown. After the price increases just put through the comps will be harder as the year laps.
One thing that keeps me from adding to CMG besides valuation is the CEO comp. Two CEO's both being paid a combined amount that lands them in the top 5 of highest paid CEO's in the world. They collectively take about 15% to 20% of all the profit Chipotle makes. Neither holds a significant stake of shares in Chipotle. They get salary and bonuses plus options which they blow out.
Just technical trading and some profit taking after the huge run. Traders and most investors are short term. What is my stock doing today? I like this because the lower the price goes the more I can buy and get add'l leverage on building out an even larger position. Bring it on...
Stock growing at 40% plus. Trading for a multiple less than half that. On Wall Street that is a setup for an easy double from here. Stock going to $160 will put the PEG in line 1.0 which is fair value. KORS firing on all cylinders now. Was in the store last week. Wife LOVED everything they had. Spent a quick grand.
Also she got the catalog and said she could order every single thing in there. She's always been in the fashion pocket of what's hot so I trust her call here. When she loses interest and something else is in vogue I'll move on.
Coach was a grower for decades. Kors can have 5, 10 or 20 years of solid growth ahead. Fashion is tough but Kors and his team seem to be all over it like no other. They have taken out and shot Coach, Spade and others. You get all this at a huge discount right now at just 83/share. Forward PE is a mere 17. Nuts. I'm buying hand over fist still
They must be right. My wife is always on the edge of fashion. She walked in the store and LOVED them. There were also a few women that came in as well and were deciding on which color they were going to purchase. I left after my wife spent a grand there and went to the food court.
She also just got the catalog and said she could by just about everything in there. She's always been the perfect canary in the coalmine. She nailed Crocs on the way in and the way out. She nailed Coach on the way in and the way out. She's nailed quite a few others as well. When she loses interest I'll know KORS is off the beat. For now they are firing on all cylinders.
Over 80M in the bank. No debt. Trades today for
Looking at Z for possible investment. Where is all the money going to create these losses. This is an asset light high gross margin internet company. Supposed to be like Facebook but it seems none of the revenue finds its way to the profit line. Trying to understand why?
Amazing that next years PE is lower for KORS than for Coach right now. Coach has declining profits and revenues. KORS smoked top and bottom line earnings and growing over 40%. Same store sales through the roof for KORS and in decline for Coach. Talk about bizarro trading world.
KORS should trade at a PE in line with its growth rate of 40 at least. Stock should be north of 150/share right now for KORS. I know some analysts have targets in the 120 range. I believe we'll see things adjust properly in the coming months and holiday season as KORS is still firing on all cylinders.