No need to remind that to those lovers of Chipotle Mexican Grill (NYSE: CMG). Investors in that former high flying company awoke to a rude awakening last week in the form of an earnings disaster that resulted in shares losing more than 20% in the day of trading after the news was released.
I play the earnings game from a trading perspective and what I saw with Chipotle was entirely predictable and therefore potentially lucrative. Specifically, I wrote in my Earnings Player Tip Sheet (a weekly review of stocks reporting earnings that week) that the mustard might be off the Chipotle burrito.
Boy was I right on that one!
Now I want to put my attention front and center on stocks like Chipotle with nose bleed type valuations that might be poised for a fall. Trends do indeed pay off.
This week there are five companies reporting results that I expect to be trigger epic collapse. The play on each of these is to bet against the company in the form of a put option. Buy your contracts immediately before the close of trading and close the position the very next day.
That’s how Earnings Players make the big bucks and you can too.
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Here are the 5 Chipotle earnings disasters in the making that you can trade this week: