After a very volatile year, finding stocks to sell in 2011 sounds like a pretty
easy task. But don't kid yourself some good companies have been unfairly
oversold, and there are a lot of bargains out there. And now that the market has
seen a sharp selloff this summer, there is a chance that many picks already have
seen the bad news "priced in." So how do you decide between stocks to sell
in 2011 and stocks to hold in the hopes of a rebound? Simple: Think of yourself
as an investor who doesn't own a thing, then look at your current holdings as
if for the very first time. Would you buy those stocks based on the current
news, at the current price? If so, then the picks are worth holding onto no
matter how bad your losses. But if you look impartially at your portfolio and
find yourself turned off by the idea of ownership, it's time to sell these
stocks in 2011 before it's too late. Here are three stocks to sell in 2011
before the turn of the new year: Chipotle I know, you like their burritos. I do
too. But Chipotle (NYSE: CMG ) shares are overcooked, and this company is a
stock to sell in 2011. Chipotle is in the vein of Krispy Kreme (NYSE: KKD ) or
Starbucks (NASDAQ: SBUX ), both of which hit walls after overexpansion. Right
now, Chipotle has a forward P/E that is a nosebleed 35.5. On the margins front,
almost every ingredient the company uses is suffering rampant inflation for
instance, nationwide beef prices are up 8% to 9% in 2011. To boot, while
companies like McDonald's (NYSE: MCD ) are well-oiled food manufacturing
machines, Chipotle hasn't even heard of portion control to protect margins. On
the growth front, there are no menu innovations or promotions to spur growth,
just opening more stores. Also throw in the fact that a 900-calorie burrito is
hardly health food and the fact that an $8 lunch is hardly a bargain given value
menus at competitors. The stock is off about 9% from its Sept. 20 peak near $350
per share, and there's a good chance it only has farther to fall.
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