After being bullish on Chipotle Mexican Grill (NYSE: CMG) for nearly 6 years and watching the stock soar from $50 to $440, on the morning of April 20,2012 I became bearish. Since my Sell rating ($430.78) that morning shares have declined $47 or -11% vs. the S&P500 index which has decline 1.62% over the same 11 week period.
click to view my sell call mention on CNBC TV 4/20/2012 (approx. 2 minutes into clip)
I issued a Sell rating on Under Armour (NYSE: UA) four weeks ago when shares hit a new all time high @ $105. Since the call, shares of UA have declined $13 or -12.55% vs the S&P500 index which is up 2.19% over the same period.
Earnings Season kicks off this week and I will be busy examining 10Qs & 10Ks looking for companies with weakening fundamentals trading at premiums that I will recommend as short picks.
Companies growing fundamentals that are trading at discounts in the market place will be included in by long picks.
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*Remember, I am only looking for value stocks that are growing on the long side and overbought stocks trading at premiums with weakening fundamentals on the sell side.
**Warren Buffett, Chairman of Berkshire Hathaway: 2000 Annual Report:
"Common yardsticks such as dividend yield, the ratio of price to earnings or to book value, and even growth rates have nothing to do with valuation except to the extent they provide clues to the amount and timing of cash flows into and from the business. Indeed, growth can destroy value if it requires cash inputs in the early years of a project or enterprise that exceed the discounted value of the cash that those assets will generate in later years.
Market commentators and investment managers who glibly refer to growth and value styles as contrasting approaches to investment are displaying their ignorance, not their sophistication. Growth is simply a component--usually a plus, sometimes a minus-- in the value equation."