Investment firm Mendel Money Management has announced its most recent acquisition, a new stake in Chipotle Mexican Grill, Inc. (NYSE:CMG). The purchase of 170 shares valued at approximately $236,000 demonstrates the company’s confidence in the restaurant operator’s growth potential.
Chipotle, which was founded by Steve Ells in 1993 and is headquartered in Newport Beach, CA, prides itself on classically-cooked food with wholesome ingredients that do not contain artificial colors, flavors or preservatives. Its menu consists of burritos, tacos, burrito bowls and salads prepared using classic cooking methods.
Shares of NYSE CMG traded down $6.66 during midday trading on Friday to reach $2,075.67 with a trading volume of 111,815 shares compared to its average volume of 296,288. Throughout the past year, Chipotle’s value has fluctuated considerably with a 12-month low of $1,196.28 and a high of $2,139.88.
Despite market volatility brought about by the COVID-19 pandemic and resulting economic downturns worldwide throughout the past year and beyond,Mendel Money Management believes that Chipotle Mexican Grill carries unique strength that exceeds industry trends and will continue to perform strongly overall.
The firm boasts a significant market capitalization of $57.27 billion with a P/E ratio of 56.32 as well as a PEG ratio of 1.49 and beta value sitting at 1.34.’Mendel Money Management decision to take stakes into this holding demonstrates its belief that Chipotle still has room for significant growth potential moving forward.
As always with stock investments even those from top firms like Mendel Money Management there are always factors outside any investor’s control which could impact market reaction and company performance.
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Institutional Investors and Hedge Funds Show Growing Interest in Chipotle Mexican Grill after Strong Q1 Earnings Report
Chipotle Mexican Grill (NYSE:CMG), a Newport Beach-based restaurant operator known for its focus on fresh ingredients, has seen a surge in investment from institutional investors and hedge funds recently. According to recent reports, various funds have lifted their positions in the company including International Assets Investment Management, Vanguard Group, CIBC Private Wealth Group, William Blair Investment Management, and Artisan Partners Limited Partnership. In fact, institutional investors and hedge funds hold an impressive 93.26% of the company’s stock.
This surge comes shortly after Chipotle Mexican Grill posted strong earnings for the first quarter of 2023. The restaurant reported $10.50 earnings per share for Q1 2023 beating analysts’ estimates of $8.89 by $1.61, indicating that the brand has been able to sustain its growth trend despite industry challenges like rising labor costs. Additionally, Chipotle announced it was expanding delivery service through a partnership with online food ordering company GrubHub that is expected to help boost sales further.
These developments seem to signal good things ahead for the fast-casual chain and are attracting attention from major financial institutions including Cowen and Oppenheimer who both gave Chipotle “outperform” ratings in recent research reports alongside price increases that raised Chipotle’s target price range to $2,050 across Wall Street.
However, some insiders at the company have taken advantage of this high valuation by selling shares themselves over the past quarter. Starting from March of this year onwards Chief Executive Officer Brian Niccol sold off almost 1 thousand shares worth over $1 million while fellow insider Laurie Schalow sold close to 4 thousand shares valued at upwards of $7 million total earlier this May.
Despite these sales by insiders, analysts remain bullish on Chipotle’s future stock performance given its historic outperformance among fast-casual chains as customers increasingly care about ingredient transparency and sustainable sourcing when considering where to eat out.
While the restaurant industry in general and Chipotle Mexican Grill specifically have faced significant headwinds during the pandemic and have experienced supply chain disruptions that increased food costs, strong earnings performance and positive institutional investment trends suggest that the company is well poised to continue growing and see its shares continue to rise in value.
