It looks like some fairly minor news has the analysts spooked about Buffalo Wings (BWLD), and the share prices have dropped by over 25% today.

NEW YORK (Associated Press) - Analysts said Wednesday that higher commodity costs are weighing on Buffalo Wild Wings Inc., after the restaurant operator’s third-quarter profit missed Wall Street expectations.

Buffalo Wild Wings on Tuesday said third-quarter profit rose 21 percent, but came in below the expectations of analysts, causing some to lower their price targets.

CIBC World Markets analyst Jeffrey D. Farmer cut his price target to $42 from $48, and said higher food costs are likely to persist in the fourth quarter and in 2008. Farmer’s price target implies upside of nearly 8 percent to Tuesday’s $38.91 closing price.

CNNmoney.com: Rising Commodity Costs Weighing on Buffalo Wild Wings, Analysts Say

I’m still very bullish on the company and see this as an over reaction, so I put in a limit order to buy 100 more shares at $31. Nothing substantial has changed for Buffalo Wild Wings. The company certainly wasn’t a full third more valuable yesterday than it is today. This is exactly the kind of short term market insanity that allows allows patient investors to triumph.

It’s always possible that something unforeseen will happen and BWLD will plummet. Barring any deterioration in the actual business, though, the stock valuation will come back. As my grandfather once told me, investing is like flipping a coin in the short term, but in the long run it’s more like flipping a cat.

I’ll update this post as events unfold.

Update: 3 hours after this post, the order filled.
10/31/2007 13:16:02 Bought 100 BWLD @ 31

I’ve also just noticed that Ctrip’s valuation has gotten a bit rich for my tastes. The mighty Ctrip probably is worth its P/E of nearly 100, but that doesn’t mean I can’t find anything better a bit further off the beaten path. I’ve put in a limit order to sell half my holdings in Ctrip at $56/share.

Legal Disclaimer: All of the information in this article is accurate to the best of my knowledge. However, I make no guarantee about the accuracy of anything written above. I’m not responsible for any mis-typings, or any other errors in the information. If you purchase any stock solely because I did, you do so at your own risk.

This entry was posted on Thursday, November 1st, 2007 at 12:03 am and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.