I tried to warn you …
Two months ago, I said investors should avoid Chipotle (CMG). The fast-casual restaurant chain saw its stock fall nearly 30% from mid-October through late-December.
The huge downturn was caused by outbreaks of E. coli found in several of its restaurants. E. coli are bacteria found in humans and animals. Some strains can cause severe food poisoning, kidney failure and even death.
In December, I received e-mails from subscribers asking if Chipotle was a buy following the huge pullback. My advice was to avoid buying Chipotle. As I said:
“Chipotle could fall another 20%, as sales and earnings will likely plunge over the next few quarters.”
Less than a month after my warning, Chipotle fell another 22%. This compares to a drop of just 4% for the S&P 500 in the same time frame.