I sold off my remaining shares of Chipotle class B shares at a loss today — the stock took a significant hit on disappointing earnings and the company’s projections that growth would be very weak in same store sales over the coming year.
I don’t generally like to use stops to sell, since I prefer to buy companies that I’m confident in even if they might take a few years to show the promise I expect. In cases where the business prospects take a turn for the South, however, it can be foolish to not recognize the facts and realize that a “growth” stock is no longer growing. Companies change — Chipotle changed not because of anything they did, but because the consumer is slowing down. That may change, and it may turn out that the company turns out to be a decent buy at these prices if they can keep a tight handle on the business during this downturn, but for now this is not the company and the future I was trying to buy when I picked up Chipotle shares.
So I’m selling. I no longer have any exposure to Chipotle in my portfolio, though there is one right around the corner from my house and I do enjoy a nice big, fat carnitas burrito every now and again. Even if, as my sister in law tells me, afterword you feel like you’ve “eaten a baby.”