Chipotle Mexican Grill, Inc. (NYSE:CMG) has demonstrated strong performance in January over the past decade. This analysis explores CMG’s historical January returns and current market position, offering insights for investors considering this stock.
While political uncertainty and potential policy shifts in the incoming administration may impact various sectors, including healthcare and food, according to insights shared in our 25 Worst Stocks to Own in January analysis, Chipotle’s historical performance in January suggests it could be a resilient investment option.
Data compiled by Schaeffer’s Senior Quantitative Analyst Rocky White reveals that CMG has averaged a 6.4% gain in January over the past 10 years, with positive returns in eight out of those 10 years. Based on its current price of $60.37, a similar gain would place CMG near $65, approaching its early December highs. This consistent positive performance makes Chipotle an attractive option for investors seeking historically strong January performers.
Despite its overall positive trend, CMG is currently experiencing a rare three-day consecutive decline. However, the 80-day moving average, a key technical indicator, is acting as support, as it has during previous pullbacks since early September. This suggests potential for a rebound.
For investors looking to capitalize on potential price appreciation, options trading may offer a cost-effective approach. CMG’s Schaeffer’s Volatility Index (SVI) currently stands at 24%, which ranks in the 18th percentile of its annual range, indicating relatively low option prices. This presents an opportunity for investors to leverage options strategies.
In conclusion, Chipotle’s historical January performance, coupled with its current market position and attractive options pricing, makes it a compelling investment consideration for January. While broader market conditions and sector-specific factors should always be considered, CMG’s historical track record suggests a potential for continued strength in the first month of the year.
