Comments on: Key Inflection Point http://zachstocks.com/2008/03/key-inflection-point/ Dynamic Investments for Exceptional Traders Mon, 26 Jul 2010 12:25:18 -0600 http://wordpress.org/?v=2.8.6 hourly 1 By: BorisB http://zachstocks.com/2008/03/key-inflection-point/comment-page-1/#comment-4468 BorisB Sat, 29 Mar 2008 15:22:51 +0000 http://zachstocks.com/2008/03/key-inflection-point/#comment-4468 also back to Chipotle you are correct to be cautious. The valuation is richer then generic growth stories in the restuarant business and you are not sure that Chipotle is any better then the other "good story" restuarant companies such as BKC. The mediations are extreme so i keep digging to figure out why. One key i pieced together from reading the '07 annual report is that the store count is 704 at year end, but in Colorado the store count is 66 with a population of 4.8 million and this might equate to 4,800 good volume units in USA. Even more impressive is that unit sales volumes in Colorado are much higher then $1.724 million chain average and Colorado is stuffed with a high store count of clones like Qdoba. and the Colorado store count is probably going to rise from the current 66. Another concept is that this might be a mini-McDonalds. The key to this theory is will consumers that eat out frequently.. will they eat at Chipotle more then once a month? will they eat there once a week? does the low entree price of $6.05 + tax create majic? also back to Chipotle you are correct to be cautious. The valuation is richer then generic growth stories in the restuarant business and you are not sure that Chipotle is any better then the other “good story” restuarant companies such as BKC. The mediations are extreme so i keep digging to figure out why. One key i pieced together from reading the ‘07 annual report is that the store count is 704 at year end, but in Colorado the store count is 66 with a population of 4.8 million and this might equate to 4,800 good volume units in USA. Even more impressive is that unit sales volumes in Colorado are much higher then $1.724 million chain average and Colorado is stuffed with a high store count of clones like Qdoba. and the Colorado store count is probably going to rise from the current 66. Another concept is that this might be a mini-McDonalds. The key to this theory is will consumers that eat out frequently.. will they eat at Chipotle more then once a month? will they eat there once a week? does the low entree price of $6.05 + tax create majic?

]]> By: BorisB http://zachstocks.com/2008/03/key-inflection-point/comment-page-1/#comment-4467 BorisB Sat, 29 Mar 2008 14:57:27 +0000 http://zachstocks.com/2008/03/key-inflection-point/#comment-4467 the equities topped out monday/tuesday and have come down steady for 3 days, with fridays weakness partially driven by the commodities trade coming off. you sense buy the dips? at this point i am trying to figure out if the current dip is going to be shallow as in friday was enough downside or if there is going to be several more days of pain. Using Chipotle. the 9 day bounce is $28 $90/$118 and the 4 day tip is $9 $118/$109... i wonder if $109 is low enough? One thing that makes me concerned about more downside risk is that something like Oracle-orcl , which has great products, lost all of its multi-day bounce progress on the earnings report for wednesday. and if demand is slack for terrific software products S&P 500 earnings season is going to be a mess. the equities topped out monday/tuesday and have come down steady for 3 days, with fridays weakness partially driven by the commodities trade coming off. you sense buy the dips? at this point i am trying to figure out if the current dip is going to be shallow as in friday was enough downside or if there is going to be several more days of pain. Using Chipotle. the 9 day bounce is $28 $90/$118 and the 4 day tip is $9 $118/$109… i wonder if $109 is low enough? One thing that makes me concerned about more downside risk is that something like Oracle-orcl , which has great products, lost all of its multi-day bounce progress on the earnings report for wednesday. and if demand is slack for terrific software products S&P 500 earnings season is going to be a mess.

]]> By: Zach http://zachstocks.com/2008/03/key-inflection-point/comment-page-1/#comment-4432 Zach Tue, 25 Mar 2008 16:38:16 +0000 http://zachstocks.com/2008/03/key-inflection-point/#comment-4432 Boris, As you know, I've had a hard time getting excited about CMG simply because the stock is so expensive relative to earnings. However, I do think this run is different than the other false starts we have seen over the last 2-3 months and this time we should get a more sustainable move. I'm not locking into long positions for the remainder of the year but for the next several weeks I think we have an opportunity to make money on the long side. As always, thanks for the comment! ZDS Boris,

As you know, I’ve had a hard time getting excited about CMG simply because the stock is so expensive relative to earnings. However, I do think this run is different than the other false starts we have seen over the last 2-3 months and this time we should get a more sustainable move. I’m not locking into long positions for the remainder of the year but for the next several weeks I think we have an opportunity to make money on the long side.

As always, thanks for the comment!
ZDS

]]> By: borisb http://zachstocks.com/2008/03/key-inflection-point/comment-page-1/#comment-4429 borisb Mon, 24 Mar 2008 20:38:33 +0000 http://zachstocks.com/2008/03/key-inflection-point/#comment-4429 zach the 4 day rally is extended a little bit. the run is dri en by the federal reserve news... which while fantastic is becoming old news.. cmg.a has bounced $27 to $117 and i cut some and took advange to buy some low end puts on the cheap. zach the 4 day rally is extended a little bit. the run is dri en by the federal reserve news… which while fantastic is becoming old news.. cmg.a has bounced $27 to $117 and i cut some and took advange to buy some low end puts on the cheap.

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