Chipotle a Falling Knife You Don't Want to Catch

5/22 - "It’s been all downhill for Chipotle Mexican Grill Inc. (CMG) ever since reporting first quarter results that were admittedly pretty good...So, what's the problem? One of the major uncertainties plaguing Chipotle is the effect of higher food costs that are expected through the rest of 2008 – commodities like rice, corn and meat, as well as potential price increases to the menu that might help out margins, but at the same time might deter restaurant goers."

"Although the valuation has come down quite a bit, reflected in the stock now trading at a more palatable 32 times forward earnings, there is downside to the numbers as analysts are likely to express concern about the current environment and make revisions to estimates in the near future...Having just broken through support at the Mar. 10 low of $90.57, the stock is probably heading down to test the Aug. 2007 lows in the upper 70’s. It’s a falling knife you don’t want to catch."