Will Chipotle (CMG) Stock Be Helped by Hiring Food Safety Experts?
NEW YORK (TheStreet) -- Chipotle Mexican Grill (CMG) - Get Report has reportedly hired two leading food safety experts as part of its efforts to defend against health scares after the Mexican food chain was affected by outbreaks of E. coli, salmonella and norovirus last year.
Chipotle has hired David Acheson, a former official at the FDA and Department of Agriculture, as an adviser, Reuters reports.
The company has also confirmed that it has brought on David Theno, a food safety consultant and former Jack in the Box (JACK) executive who is credited with improving food safety at the fast-food chain following a deadly E. coli outbreak during the 1990s, Reuters adds.
Acheson and Theno will be working with Chipotle's executive director of food safety James Marsden, a former meat science professor at Kansas State University. The company announced in March that it had hired Marsden.
The trio will be tasked with helping Chipotle win back diners after a series of disease outbreaks last year weighed on sales and reduced its market valuation by $6 billion.
"If I had to put together a dream team to fix something, you could do a lot worse," Don Schaffner, a food science professor at Rutgers University, told Reuters. But, he added: "I've begun to wonder a little bit about too many cooks. Each of those guys is going to have a perspective on what to do to fix the problem."
Shares of Chipotle are flat in pre-market trading after closing up by 0.53% to $455.59 on Tuesday.
The company is scheduled to hold its annual meeting later today.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Chipotle Mexican Grill's strengths such as its very decent return on equity which we feel should persist are countered by weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.
You can view the full analysis from the report here: CMG
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
