5 Stocks to Avoid Shorting 11/21/11
These stocks have been on fire. With ridiculous multiples, they look primed for a correction. But not so fast... their growth story may not be over just yet. Stay away, or risk getting burnt.
1. Dunkin Donuts (DNKN). Coffee margins are absurd. A coffee addicted America has no problem paying a couple bucks for a cup of that costs only pennies to make. A multiple of 350 tells you to short it, but a coffee crazed consumer won’t disappear anytime soon.
2. Chipotle (CRMG). Excluding Five Guys, Chipotle is the fastest growing restaurant chain in the U.S. And besides, bros love burritos.
3. Research in Motion (RIMM). The stock has been slaughtered this year, and for good reason. RIMM can’t compete with Google or Apple in the smartphone and tablet market. But sorry bros, its too late, you missed out on this butchering.
4. Salesforce.com (CRM). An insane P/E (~500) and vauge FY '12 guidance, CRM has seen a pullback post-earnings. This cloud-based computing software company has expected growth of 30% quarter to quarter and a more reasonable forward P/E of 65. Wall Street has proven it is willing to pay extreme multiples for fast growth. Don't go betting against any company involved in the years hottest new technology, cloud computing.
5. Amazon (AMZN). Amazon has taken a beating the past month after reporting Q3 earnings. The holiday season will be a good one for this online giant. No one knows if the Kindle Fire will be a flop or a huge success… and neither do you.
1. Dunkin Donuts (DNKN). Coffee margins are absurd. A coffee addicted America has no problem paying a couple bucks for a cup of that costs only pennies to make. A multiple of 350 tells you to short it, but a coffee crazed consumer won’t disappear anytime soon.
2. Chipotle (CRMG). Excluding Five Guys, Chipotle is the fastest growing restaurant chain in the U.S. And besides, bros love burritos.
3. Research in Motion (RIMM). The stock has been slaughtered this year, and for good reason. RIMM can’t compete with Google or Apple in the smartphone and tablet market. But sorry bros, its too late, you missed out on this butchering.
4. Salesforce.com (CRM). An insane P/E (~500) and vauge FY '12 guidance, CRM has seen a pullback post-earnings. This cloud-based computing software company has expected growth of 30% quarter to quarter and a more reasonable forward P/E of 65. Wall Street has proven it is willing to pay extreme multiples for fast growth. Don't go betting against any company involved in the years hottest new technology, cloud computing.
5. Amazon (AMZN). Amazon has taken a beating the past month after reporting Q3 earnings. The holiday season will be a good one for this online giant. No one knows if the Kindle Fire will be a flop or a huge success… and neither do you.
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