CMG stock, which is the stock symbol for Chipotle, will always be a regretful one for me.
I added it to my portfolio back in 2014 for two reasons:
- From a technical analysis point of view, it was a clear winner
- I liked the company’s ethos when it came to food quality and sustainability
For a capitalist treehugger like me, this was a no-brainer. And for a while, CMG stock paid off quite well.
But in 2015, something happened that completely derailed the stock: an E. coli outbreak traced back to a number of Chipotle restaurants that sickened around 1,100 people. For a company that prided itself on healthy, fresh food, it was nearly a death blow. Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
The stock tanked, and all the gains I had amassed were wiped out almost instantly.
When the news first broke about the outbreak, I immediately tried to figure out how it happened, and of course, how bad it really was. While E.coli outbreaks are not unheard of, for Chipotle, this just seemed out of character.
Not long after the first outbreak, there were rumblings about the E. coli outbreak being suspicious. According to Dr. William Schaffner, a professor of infectious diseases at Vanderbilt University’s School of Medicine, such a high number of outbreaks tied to a single chain was somewhat unprecedented.
This series of outbreaks with one chain has everyone, including my friends at the CDC, scratching their heads.
Some investigators suggested corporate sabotage by the biotech industry, noting that the outbreak began shortly after Chipotle publicly announced it would not sell any genetically-modified food at its restaurants.
Others suggested that this was a well-orchestrated plan concocted by Chipotle short sellers who made tens of millions of dollars after CMG stock plummeted on the news of the E. coli outbreak.
There was no evidence to support either of these claims. However, as reported in Business Insider, the first reports of E. coli sickening Chipotle customers were revealed in October. Three months and thousands of tests later, health investigators still couldn’t find the source of the outbreak.
That’s unusual, according to several food-contamination experts. In five similar high-profile cases of major foodborne-illness outbreaks over the last couple decades, the source of the outbreaks was determined relatively quickly.
On top of investigations by state and local health officials, Chipotle has done hundreds of internal tests on its food and surfaces without finding a trace of E. coli.
Ultimately, Chipotle paid a $25 million fine, made some changes to address food safety, and just moved on.
I don’t tend to embrace conspiracy theories unless I’ve personally uncovered evidence to suggest they have merit. And while I know Chipotle management didn’t make many friends after eschewing GMOs, there’s just no proof that this was the result of corporate sabotage.
Still, after unloading the stock, I never returned to it. I should have.
To be honest, it wasn’t because I no longer liked the company. It was just that I had put it in the back of my mind and kind of forgot about it. And boy was that a mistake. This is how CMG stock has performed since the E. coli outbreak…
CMG Stock is Crushing it
As you probably know, Chipotle has initiated a rare 50-to-1 stock split. It’s one of the largest in history, and those who didn’t bail on the stock when it tanked are being well-rewarded today.
Looking back, obviously, I wish I would’ve ridden out the storm with other Chipotle bulls. But alas, I did not. And for that, I’m regretful. But the truth is, no one just buys one stock and hopes for the best.
While I did miss out on that big Chipotle run, I more than made up for it with some very well-timed investments in some pot stocks that were also in my portfolio when I dumped Chipotle. One of those stocks, Canopy Growth Corporation (TSX: WEED), ended up delivering a gain of 3,015% before I recommended selling it. Make no mistake: that stock created millionaires.
Now I do believe that with this latest 50-to-1 split, Chipotle is going to be successful in attracting more retail investors. That’s not to say I’m going to buy the stock, though. While I don’t doubt that CMG stock will do quite well in the coming years, I just know that there are other opportunities right now that’ll give you a lot more bang for your buck.
Like this new government stimulus stipends program that’s paying as much as $8,000 per quarter.
It’s a little-known opportunity that lets you profit from government-funded real estate programs all across the country. We actually first got word of this thing after uncovering a secret 19-page memo from President Biden. Now we’re seeing investors like you pulling in nearly $8,000 every quarter.
You can get some of this action for yourself, too. Here’s how you can start today. To a new way of life and a new generation of wealth… Jeff Siegel
@JeffSiegel on Twitter
Check us out on YouTube!Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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