Perhaps the biggest loser Wednesday was HHGregg ( HGG). The appliance and electronics retailer cut its full-year forecast and posted first-quarter guidance well below Wall Street expectations. The stock plummeted 36% on heavy volume. So enough horror stories for one article. How about a buoyant stock like Chipotle Mexican Grill ( CMG)? CMG has been a highflyer among restaurant and fast-food stocks for some time. The five-year chart below shows its price trajectory compared to its price-to-sales ratio. CMG Price / Sales Ratio data by YCharts
For those of you who own CMG, which is well off its 52-week high of $442, I'm yelling "watch out below," because it still looks ridiculously overpriced. Why would anyone want to own a stock that is selling at a price-earnings-to-growth ratio of almost 2, based on five-year expectations, and is also selling for five times its sales? Granted they make wonderful Mexican fare, but CMG is trading at a trailing price-to-earnings ratio of 52, and a jaw-dropping forward P/E of over 34.