Are Volkswagen AG and Chipotle Mexican Grill Attractive Short Term Trades?

While I normally take the long view when it comes to choosing stocks, sometimes short-term weaknesses in otherwise solid companies prompt me to think about a short term trade.

The Volkswagen AG emissions debacle and current E. Coli outbreak with Chipotle Mexican Grill which has sent investors fleeing from these stocks may be such opportunities.

Most investors would agree that while the diesel emissions scandal is significant and will be costly to rectify (both in term of money, negative press etc.), it is not likely the death knell for the massive Volkswagen AG. The Company has significant financial resources to weather the current storm and has already undertaken further cost-cutting initiatives and put new blood in the C-suite in an attempt to steer the Company through one of the most tumultuous times in its history. Volkswagen AG ordinary shares are down about 25% for the year.

Shares in Chipotle Mexican Grill dropped 12% on Friday (YTD: -12.75%) after the CDC reported several new cases of E. Coli had been connected to the fast-growing restaurant chain. While the fall has not been as drastic as that of Volkswagen, many see the unfortunate E. Coli situation as manageable and the Company should soon be back on track. A similar E. Coli situation occurred at the Jack in the Box (NYSE: JACK) restaurant chain in 1993 and while quarterly sales in the period the news broke dropped sharply, the following year saw comp sales rise modestly and now JACK seems to be back in shape.

Do you think Volkswagen AG and Chipotle Mexican Grill are attractive from a short-term trading point of view?




The Week That Was


The week leading up to American Thanksgiving saw both the DOW and S&P 500 close more or less flat over the previous week, while Canada’s S&P/TSX composite fell a modest 50 bps. The European indexes all closed higher, with Germany’s DAX occupying the week’s overall top spot thanks to a gain of 1.56%. France’s CAC 40 continues to lead the pack on a YTD basis with its return of +15.39%.

PACCAR; A ‘Truckload’ of Value?

PACCAR (NYSE: PCAR) is one of the largest manufacturers of premium light, medium, and heavy duty vehicles in the world. However, the Company¬†thinks of itself as a technology business involved in truck manufacturing…truck or technology, I believe PACCAR offers good long-term value for investors. Lets take a look at the Company’s last five years shall ¬†we? Continue reading

Updated: Where Are They Now?

Check out the updated “Where Are They Now” page to see where the stocks I like are currently trading.

The Week That Was


Profit taking was the name of the game last week as 6 of the 7 indices posted sharp declines, with the DOW and CAC 40 tying for first place in this dubious competition. Strong October job numbers are making an even louder case for a December interest rate lift off. Long-term investors may want to take the opportunity to increase exposure in their preferred stocks upon further weakness in the weeks ahead (once the business case for investing in the model has not changed materially of course).