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Sell-side firms are harsh on Chipotle (CMG -21%) after the big post-earnings drop on growth...

Sell-side firms are harsh on Chipotle (CMG -21%) after the big post-earnings drop on growth concerns and rising food costs. Thus far, CMG has been removed from the Conviction Buy list at Goldman, and downgraded at Janney and Deutsche Bank. Whole Foods (WFM -5.6%) opens sharply lower following the negative sentiment.
Comments (8)
  • thomptex
    , contributor
    Comments (52) | Send Message
     
    I see little connection between WFM and CMG. CMG is overpriced
    relative to its physical assets ($10 million per restaurant). There
    are plenty of substitutes for what CMG offers. Not so with WFM
    which has a near monopoly position in what it offers. WFM is
    now bigger than Safeway. The American people want fresh produce,
    locally grown, and generally a quality of goods which used to
    be available in the small groceries which Safeway and Kroger
    ran out of business.
    20 Jul 2012, 11:23 AM Reply Like
  • kblover
    , contributor
    Comments (64) | Send Message
     
    I'm glad I'm not the only one could can't figure the connection between the two.
    22 Jul 2012, 03:35 PM Reply Like
  • phemale60
    , contributor
    Comments (2815) | Send Message
     
    I don't understand your point re CMG. Substitutes? Where? Austin or New Orleans maybe? In midtown Manhttan the lunch line at CMG is huge and stays that way from 12 to 2 and later. And the food is delicious! Most fast food restaurants can't make that claim. I wasn't investing early enough to get CMG at a good price -maybe now I can buy some if it dips far enough. Just sayin for fast food decent lunch Chipotle a treat!
    22 Jul 2012, 09:05 PM Reply Like
  • djohnsonhot
    , contributor
    Comments (635) | Send Message
     
    Hi, Thomptex....I actually sold a put last week on WFM and quickly closed the position when I discovered that there was a "saucer-shaped roll-over" happening. I had a bad gut feeling there. I also made a very bad mistake by selling a put at near-highs...shame on me.

     

    Anyway, I still booked a small profit only to the continue to see that WFM has been falling due to (supposed) commodity costs rising (HMMM - - there will be little immediate impact there)....and now a supposed Chipotle-impact (CMG) short pattern.

     

    There WILL be support somewhere here for WFM and I will then try again! It is on my watch list.

     

    Fundamentally, WFM is expected to show some earnings progress next week. We shall see.

     

    Watching WFM, MCD, WMT on pullbacks for some Put selling into Aug exp.
    20 Jul 2012, 12:47 PM Reply Like
  • uckinallstar
    , contributor
    Comments (92) | Send Message
     
    When does WFM release their earnings? I sold mine yesterday thank god
    20 Jul 2012, 04:58 PM Reply Like
  • phemale60
    , contributor
    Comments (2815) | Send Message
     
    WFM earnings report July 25th --- and it's been my experience it drops before earnings but then rises again. I've held since 2010 and not day trading my gains away; cannot think of a better company to invest in with the gains anyway -- Whole Foods expanding and people shop there no matter how harsh the economic times are.

     

    Whole Foods has dropped due to Safeway poor report as it has in the past but recovers nicely; near $100 not long ago.
    20 Jul 2012, 07:01 PM Reply Like
  • health69boy
    , contributor
    Comments (2) | Send Message
     
    WFM has a lot going for it. For starters, they appeal to three different (although not necessarily mutually exclusive) demographics: the well to do, those who are serious about their health (see, for examle: http://bit.ly/Ofyy9W), and those with an obesity problem.

     

    In addition, while they are a "glamorous" growth stock-- they are also a good defensive play (to buy on dips-- the multiple is a tad high now). Defensive, because they sell food!

     

    In the past they carried mainly expensive items, but now they are working towards carrying more moderately priced products as well. Some of their house brand "365" products are as inexpensive as those in other supermarkets in my area-- some are even less expensive.

     

    And, finally, this is what really helped me make up my mind to buy the stock a while back (at $83/share)-- they have just started an incredible program called "The Wellness Program".
    (http://bit.ly/M1zTVK).

     

    Right now its a pilot in just five cities (http://bit.ly/Ofyy9X)--- but when it takes off it should be a real money maker for WFM!
    21 Jul 2012, 12:45 AM Reply Like
  • phemale60
    , contributor
    Comments (2815) | Send Message
     
    Thanks for the info. As obesity soars and healthy eating becoming more mainstream (unlike 30 yrs. ago when looked at as just freaky) companies like Whole Foods, Annie's (BNNY) and Hain Celestial (HAIN) are becoming stable stocks to hold, I have found. I would have them all except for the ingrained lesson to diversify! WFM has added a dividend also.
    21 Jul 2012, 02:55 PM Reply Like
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