Seeking Alpha

A taco too far? Shares of Chipotle (CMG) recover more than half the ground lost after David...

A taco too far? Shares of Chipotle (CMG) recover more than half the ground lost after David Einhorn unleashed his short thesis on the company yesterday. Though the argument on valuation and commodity costs resonate, Einhorn seems to have lost the investment community with his take that Taco Bell's (YUM +0.3%) refreshed menu will steal significant market share from Chipotle. The counterpoint being bandied about is that CMG's brand equity and Taco Bell's long history as an unhealthy fast-food stopping off point make the two chains too far away for direct comparisons.
From other sites
Comments (3)
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    I have never studied Chipotle, so have no comment on whether it is a good short or not. But I find the thesis that Taco Bell is going to steal customers from Chipotle... interesting. Taco Bell, however successful a business is crap food. It's the place I went to as a poor young man, after a big night of drinking, because everybody else had already closed by the time the munchies kicked in. LOL

     

    At the time Frito Lay was experimenting with Olestra (?) and was forced to put warnings about "anal leakage" on its bags, a friend quipped "why doesn't Taco Bell also have to post that disclosure?!"
    3 Oct 2012, 11:41 AM Reply Like
  • Ricard
    , contributor
    Comments (3829) | Send Message
     
    CMG is somewhat overvalued at $300. Agree that the comparison with the 4th meal king Taco Bell is a bit off...I don't see a lot of people looking for quality health food at 2:00AM.
    5 Oct 2012, 06:21 PM Reply Like
  • JSerge
    , contributor
    Comments (11) | Send Message
     
    That stuff will kill you. Its all about healthy food choice and Taco Hell is not one of them. Very different business models.
    21 Nov 2013, 03:44 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector