Chipotle Mexican Grill, Inc. (NYSE: CMG)
Chipotle Mexican Grill has fallen on some hard times as of late. However, you wouldn’t be able to tell that by looking at the growth we’ve seen on the stock as of late. Nonetheless, the hard times started in October, when CMG peaked at over $750 per share. Around this time, cases of E. coli started to pop up, leading to fear among consumers and investors alike. However, the scare is over and now may be time for growth. Today, we’ll talk about the E. coli scare, what we’re seeing in the market today, and whether or not now is the time to buy CMG. So, let’s get right to it!
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CMG Falls In October After E. Coli Becomes A Concern
As mentioned above, the problems started for Chipotle in October of 2015 when consumers started to go to the doctor as a result of becoming ill with E. coli. Unfortunately for CMG and its investors, all of these consumers had recently eaten at the restaurant. Soon, more than 50 cases of E. coli were linked to CMG restaurants in 9 different states. From there, Chipotle started to see sales decreases and their stock followed in a big way. Unfortunately however, their problems weren’t over just yet.
In November, new cases of E. coli started to emerge. This time, the strain of the illness proved to be completely different than the strain that was seen in the original outbreak. While this particular outbreak was found in only one state, more than 100 consumers became sick. Once again, the only thing that those that got sick had in common was that they had recently eaten at Chipotle. This was another big hit for CMG and its investors. However, it would prove to be the last.
In January, the Centers for Disease Control and Prevention made a statement that excited CMG investors. The outbreak was finally over. While the CDC wasn’t able to pinpoint the root cause of either outbreak, they did say that the investigations into the outbreaks were over and that they believed that CMG foods were safe once again.
What We’ve Seen In The Market Since
While CMG fell dramatically as a result of the outbreaks, we’ve seen incredibly positive movement on the stock since the United States Centers for Disease Control and Prevention announced that the outbreak was over. The strong movement on CMG is continuing today. Currently (11:03), the stock is trading at $485.24 per share after a gain of $23.85 per share or 5.17% thus far today.
Is Now The Time To Start Investing
First and foremost, it’s important to do your own research, never take anyone’s word for it. With that said, in my opinion, it is time to start investing in CMG. Due to the E. coli scare, the stock has fallen to an incredibly appealing price. Now that the scare is over, I’m expecting to see a slow, yet steady recovery in sales, and therefore, the stock! The reality here is that CMG is a great company, and I haven’t run into one person that didn’t like the food the company offered. While consumers will likely hold onto the E. coli outbreak for the short term, soon enough, these fears will go away and CMG will be back to serving up massive amounts of those delicious burritos every day. All in all, I believe that things are looking great for Chipotle moving forward.
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What Do You Think?
Where do you think CMG is headed moving forward? Let us know your opinion in the comments below!
[Image Courtesy of Flickr]