Today’s news: Sell Chipotle Mexican Grill (CMG).
Yesterday’s $83 run-up in the share price of Chipotle Mexican Grill (CMG) outpaced analysts’ projected increase in 2018 and 2019 earnings, which resulted from the strong first quarter earnings report. Yes, the company is doing very well financially, but the stock is now even more overvalued than it was before the earnings report.
Stocks that run up 24% in one day almost always come back down significantly within a couple of trading days. Sell CMG now in favor of a more undervalued growth stock. (If you love the stock and don’t mind the valuation, then sell now and buy it back after the pullback.) Sell.
I plan to add at least one new stock in the May issue of Cabot Undervalued Stocks Advisor, which will be published on Tuesday, May 1.