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Friday Morning Call:
Sell CMG $430
Chipotle Mexican Grill, Inc. (NYSE: CMG)
Operational Cash Flow per share (OPS) declined 57% year over year
Equities Research has been bullish on CMG since the IPO in 2006.This morning after examining the FY2012 10Q I saw a disturbing number,
$0.93 OPS (Q1 2012) vs. $2.17 (Q1 2011).OPS DECLINED 57%
CMG reported $29 million in Operational Cash flow down from $68 million a year ago. CMG had 22 of 23 quarters of year over year OPS growth.
(Q1 '09 to Q1 '10, OPS fell 3%)
This quarter also marked the first time Earnings Per share was greater than OPS.
1Q 2011 CMG had a positive $1.47 OPS spread
1Q 2012 CMG had a negative $1.04 OPS Spread
This is the first time in 29 quarters the OPS Spread is negative
Cash Cycle Spread
1Q 2011 CMG had a cash cycle of 1.6X
1Q 2012 CMG had a cash cycle of 0.46X
This is the first time in 29 quarters that the cash cycle is below 1.0X
OPS trailing 3 months
4Q 2010- 1Q 2011 $92 million to $68 million (-26%)
4Q 2011- 1Q 2012 $120 million to $29 million (-75%)
OPS Multiple Trailing Twelve Month
TTM 1Q 2011 $9.36 OPS X 31
TTM 1Q 2012 $11.74 OPS X 36
CMG will remain a 1 (highest) ranking on Stockdiagnostics. (although OPS continues to be positive and showed TTM year over year growth of 25%, today's first quarter decline has signaled a Sell Rating by Equities Research).
Update: April 21,2012 On the conference call yesterday there was not any reference by the company nor any questions by all the analyst on the call regarding the cash flow statement.
CMG posts at Equities Research earlier this year
March 28.2012 BULLISH
Chipotle Mexican Grill, Inc. (NYSE:CMG) closed yesterday at an all-time high of $348.75. CMG was one of the top performing stocks in 2011, trading up 58% on the year.
Stockdiagnostics upgraded CMG to a "1" ranking on April 27, 2006, after the company reported 1st quarter financials for the period ending March 31, 2006. Since being ranked a "1", CMG has had a cumulative return of 587% vs. the Standard & Poor 500 Index, which is 2% lower over that same period. CMG shares have annualized 41% per year.