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Fidelity Contrafund Continues To Slash Stake In Struggling Chipotle

TedTed
in Fund Discussions
FYI:
Fidelity's Contrafund (FCNTX.O), the largest mutual fund investor in Chipotle Mexican Grill Inc (CMG.N), cut its stake in the struggling burrito chain by 19 percent in August, Fidelity disclosed on Friday.
Run by portfolio manager Will Danoff, Contrafund reported holding about 790,177 shares in Chipotle at the end of August. That was down from about 980,000 shares in the previous month, according to Fidelity fund disclosures
Regards,
Ted
http://www.reuters.com/article/us-fidelitycontrafund-chipotle-idUSKCN1202H7?il=0

Comments

  • msf
    Well, sure.

    Now that their Chiptopia summer promotion is ending, where's the top line revenue going to come from?
  • hank
    edited September 2016
    I find it amazing that one mutual fund can have that big a stake in any business. First came across that in Barrons couple weeks ago. Still boggles my (feeble) mind.

    Can't vouch for their menu, having never eaten there. Had a lot of Chilis in our area when we lived downstate in the 90s and always enjoyed eating there. Decent food at decent price and nice beer selection.
  • msf
    A diversified mutual fund (let alone a non-diversified fund) is allowed to own up to 10% of a company (so long as that doesn't constitute more than 5% of the fund's assets).

    Chipotle has nearly 30M shares outstanding, so Contra's 2M at the end of 2015 was under 7% of the company. And with over $100B in AUM, those shares worth under $1B at the time (less now) represented less than 1% of the fund.

    The numbers seem so large only because Contra is such a huge fund.

    Chili's is classified as casual dining. In this group, it strikes me as near the bottom of the pile, similar to TGIF in atmosphere, portions (big) and quality (greasy). It's okay, I'll eat there in a pinch. But there are better ones in the category. For Tex Mex, I'd take Chevy's over it any day.

    Chipotle is in a lower "class" of restaurants - fast casual. I find the food much better (and cheaper), and while IMHO it is one of the better ones in its class, it has solid competition from places like Panera and Cosi.
  • catch22catch22
    Hi @msf
    That Cosi name moved my old brain cells.

    http://www.usatoday.com/story/money/2016/09/28/cosi-restaurant-chain-chapter-11-bankruptcy/91226492/
  • msf
    Hope they survive. I really like their tomato basil soup.
  • Sven
    I too really like Chipotle especially at airports. Food has always been reasonably priced and tasty. Their spicy salsa is really good.
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