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Chipotle ecoli outbreak


feynmanresearch
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Have you consumed food from Chipotle since the ecoli outbreak?  

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  1. 1. Have you consumed food from Chipotle since the ecoli outbreak?

    • Yes
    • No
    • Yes, but I'm not telling you


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Nope. Assuming you're scuttle butting for a potential short idea, here's a write-up from Raper Capital on shorting Chipotle: http://rapercapital.com/2015/12/07/behavioral-investing-case-study-short-chipotle/

Comparing Chipotle to Lumber Liquidators doesn't make a whole lot of sense. One sold a high dollar item, infrequent purchase using inventory that didn't comply with multiple (very different) laws, denied it for a long period of time and got caught. The other sold $7 burritos, had a supply chain issue and seemed to take the appropriate actions to fix it (or at least figure out where the problem started).

 

I ate there today. No crowds!

 

I'm not really concerned about the long-term direct financial impact of e coli, but I do worry that it weakens their "better ingredients, better burritos" marketing. If the same ingredients are used in Boston and Seattle they aren't very local

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I haven't eaten there since the outbreak, but it's not due to the ecoli outbreak.  At least in Cincy there are local burrito chains taking market share.  One such place is Curritos.  They are a block away from the downtown Chipotle location.  And yes the Chipotle has a primo location on Fountain Square and most of the time there's a line to the door.  However, part of that long line is due to demand, the other part of it is slow service.  The Currito location has four registers and two assembly lines.  They will move 4 to 5 times the amount of people that Chipotle does during lunch hour easily. 

Another item is product control.  I can go to this Chipotle on several different times, order the same burrito with same ingredients and none will be the same.  For consistency and quick service I go to Curritos.

 

I wonder how many other local areas have seen an increase in local burrito joints opening up.  Have you seen the same?

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This is the time to back the truck up and load up on more shares of Chipotle.

 

This is a great company that is no longer a one trick pony. They're also growing with more ShopHouses and Pizzeria Locale locations.

Management recently did a $300 million share buyback because of the E Coli issue.

 

I agree it is a good company - as does the market. It isn't cheap by any means even with the e. coli drop.  I assume it will get cheaper after a quarter or two orf terrible SSS regardless of the long term prospects.  I will wait for that to (possibly) happen.  Otherwise it hardly seems like a truck loading opportunity to me.

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This is the time to back the truck up and load up on more shares of Chipotle.

 

This is a great company that is no longer a one trick pony. They're also growing with more ShopHouses and Pizzeria Locale locations.

Management recently did a $300 million share buyback because of the E Coli issue.

 

I agree it is a good company - as does the market. It isn't cheap by any means even with the e. coli drop.  I assume it will get cheaper after a quarter or two orf terrible SSS regardless of the long term prospects.  I will wait for that to (possibly) happen.  Otherwise it hardly seems like a truck loading opportunity to me.

 

This is what I'm watching hoping/watching for. If Q4 results are miserable and it takes another hit, I might be interested.

 

Also, I haven't eaten at Chipotle since the outbreak, but not because of e-coli. I just have generally found it expensive for what you get - but have eaten there occasionally and do enjoy it. I just live near Spanish Harlem in NYC and can find legit burritos for significantly less than the $8-9 they cost at CMG.

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