I see the long knives out for Chipotle (CMG). Who wants to own a stock where the same-store sales declines actually hit 40% for a given week? You want to be involved with the shares of a company that's being investigated by the Justice Department? Who knows when the customers will come back when there's been such incredibly bad publicity because of the E. coli and norovirus outbreaks?
I know the answer: the company itself. It has bought back hundreds of millions of dollars' worth of stock during this period and it is not stopping, sopping up the shares of all who choose not to believe this company can't come roaring back as soon as this year.
I think the company is right and the sellers are wrong, even as they could be right for 20 or 30 points at a given time because the stock is so volatile.
Why be bullish about a company that told you its raw costs are going up, its safety solutions are expensive to implement?
Short memories. Does anyone remember the four children who died from E. coli caught at Jack-in-the-Box (JACK) more than 23 years ago? Didn't think so. (Jack-in-the-Box is part of TheStreet's Action Alerts PLUS portfolio.)
If people can get past that, you think they can't get past this?
Maybe more recent events will jog your memory? How about the E. coli incident at Taco Bell: 71 people sick in five states a decade ago. Go to a long-term chart of Yum Brands (YUM). You can't even see the decline!
Now think about the love for Chipotle before this. Love because people think they will live longer by going there. They've just been waiting for the all-clear.
They have gotten it.
I think you may have gotten it yesterday, too.