Chipotle (CMG) announced earnings and they blew through analyst estimates. Earnings were up 75% from a year ago due to more restaurants, more customers and slightly higher menu prices. Apparently, Chipotle locked in prices on key items, like cheese, so they haven’t had to face the higher dairy prices this year (as some competitors have.)

Smart move.

They are also beginning expansion overseas, with their first store in Toronto opening early next year.

The stock is very pricey- trading at 56 times its 2008 forward earnings. It has doubled this year.

But some posters on the Yahoo Message Board seem to think that Chipotle is the “next” McDonalds. Is it?

A year ago I predicted CMG would double every year except one for the next six years.
OK, we’re already up over 100% this year, so we’ll probably correct in January.
But by March we’ll turn around and should end 2008 much higher than now.

All this is based on CMG repeating what MCD did between 1966 and 1972 (with this year modeling 1967).
So far its been a close match.

Does Chipotle have the kind of market expansion that McDonalds had back in the 1960s? I don’t know. There is certainly more competition now than in the 1960s. Also, what happens if the consumer really pulls back on spending (including restaurant spending.) Chipotle is NOT Taco Bell (the cheaper alternative.)

Chipotle is certainly growing very quickly. But quick enough to support the stock price? Stay tuned.

Techies are going ga-ga over Microsoft’s gangbuster earnings. Nearly every analyst has commented how much better they were- far beyond anything they were expecting.

It’s nice to surprise the analysts to the upside, for once.

You’d think the question going forward would be- can they do it again next quarter and the quarter after that? And some investors are asking that. But many are simply obsessed with beating Google (for justifiable reasons.)

As this poster, pirranhajo said on the Yahoo Message Board under a message called “Congratulations! Now time to beat GOOG”:

Basically from now on ,the war will be online ad field. GOOG got DCLK we got AQNT. Still GOOG has edge over MSFT. We shouldn’t let them take over DCLK at the beginning, anyway it doesn’t matter now, we may see minor ad -company aquisitions like VCLK, then we are set to beat GOOG in his own game imo. Bottomline is that MSFT gotta get bigger pie from ad markets .I believe if management executes wisely we may see 50$ in 6 month.

Is this right? Is the “war” really in advertising?

Because Google isn’t much more than one big advertising company. That’s how they make their money- by being the conduit for ads. Is that all that Microsoft is or aspires to be? And if so- what kind of a company is that?

I’m not saying the money isn’t there- because it is. But, again, advertising is NOT a “product” -per say. Halo is a product. XBox is a product. Vista is a product. A Google ad is not a product.

Perhaps Microsoft can win the “war” by doing what Apple is doing: focusing on the product.

I’m just saying.

Sell! Sell! Sell!

Coach (COH) is getting hammered today even though the company had stellar earnings yet again this quarter. Why is it down? In the conference call their CEO said that foot traffic in U.S. stores had slowed the past few weeks.

The large institutions seem to be dumping the stock as very heavy volume is trading hands. Normal volume is 5 million shares and we will see six times that during the session.

There appears to be some panic on the Yahoo Message Boards, like this message from hidal46go under the title “URGENT COACH SELL”:

I’m a long stock holder but now deeply worried. my targets for coach has gone below expectations. Usually this never happens. I follow this stock alot. Is now evident that will get worst. Some factors that will cause the stock to go lower within the next few days are:

The problem of oil going higher. Options expiration week. and the credit crunch that still lurks around. This may also include the fact that not many are spending as much as the goverment retail report claims. Not to mention the fact that some companies have reported their earnings below expectations.

My stragety, take your loses for now and wait and see. It is likely that coach will reach $37.00 below that, it will signal the company is in trouble.

Coach is trading below $37 a share- so apparently they are in “trouble”.

That makes no sense.

The stock price doesn’t always reflect the reality of what is happening in the company. As I said, the earnings reported today were excellent. The company is still firing on all cylinders. Yes- things may be slowing slightly in their U.S. stores. But it’s too soon to panic.

With the stock off over 11% today, it might be worth taking a second look at this company. It just went on “sale.”

To say that E*Trade shareholders are furious would be an understatement. Only two months ago, E*Trade’s CEO issued a statement reassuring investors that they would not be caught in the subprime downdraft, even though E*Trade has a sizeable mortgage business. Several weeks ago, the company changed its tune and said, yes, it was going to be impacted.

Earnings were released today and they were not good. The company decided to take a loss and just write off the $200 million in mortgage securities. The company came in at a loss of 14 cents versus analyst estimates of a gain of 10 cents. Within the last three months, the stock has lost over 50% of its value and it’s not done going down yet.

Sentiments on the Yahoo Message Boards are running high- mainly along the lines of asking for E*Trade’s CEO to be fired and calling the company a “mickey mouse” business. Sentiments are also reflected from one poster who said:

It now expects earnings of 75 cents to 90.
The management has not come clean.
Lies, lies and more lies will not make the stock going up.
ETFC can lose up to 12 billion dollars in bad loans.
Longs join to the class action sue or give your shares to charity.

Beware of shareholders who lose 50% in their investment. It’s never a good place to be.