Topic: How To Invest

Stock Pickers Digest Hotline – Friday, September 9, 2016

Article Excerpt

CHIPOTLE MEXICAN GRILL INC., $426.55, symbol CMG on New York, is a Denver-based Mexican restaurant chain. It charges slightly higher prices than fast food companies but offers better quality food, including naturally raised meat and superior decor and service. The stock rose this week after activist investor Bill Ackman revealed that he now owns 9.9% of Chipotle through Pershing Square Capital. Chipotle shares are down 42% from their 2015 high in the wake of food-safety concerns at its restaurants. This includes a case of salmonella in Minnesota, E. coli in several other states, and the norovirus in California and Boston. The involvement of Bill Ackman and Pershing Square should be a plus for Chipotle, because Pershing Square has a long history of making undervalued companies—including restaurant chains—more profitable. For example, in 2006 Ackman and Pershing helped pressure Wendy’s International (a stock we recommended at that time in both our Wall Street Stock Forecaster and Stock Pickers Digest newsletters) to sell shares in…