10 Best Food Stocks To Buy According to Hedge Funds

4. Chipotle Mexican Grill, Inc. (NYSE:CMG)

Number of Hedge Fund Holders: 69

Chipotle Mexican Grill, Inc. (NYSE:CMG) is a popular fast-casual restaurant chain known for its customizable burritos, bowls, quesadillas, tacos, and salads. The chain offers convenient dining options, including in-store dining, takeout, and delivery services across different locations in various countries. CMG ranks fourth on our list of the best food stocks.

The company’s focus on high-quality, affordable Mexican food, coupled with its efficient operations, has driven sales growth by 13% during Q3 2024 to reach $2.8 billion. Chipotle Mexican Grill, Inc.’s (NYSE:CMG) marketing initiatives including the relaunch of its smoked brisket and improvement in its Net Promoter Score have led to higher foot traffic and growing order amount. This has driven positive analyst sentiments towards the stock.

Going forward, Chipotle Mexican Grill, Inc. (NYSE:CMG)’s aggressive expansion plans, including the addition of 280 to 315 new restaurants this year and the expansion of its digital offerings at these locations, are expected to fuel future growth. Besides this, the company anticipates mid-to-high single-digit comparable sales growth for the full year of 2024.

Here’s what Pershing Square Holdings said about Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q2 2024 investor letter:

“On August 13th, Chipotle Mexican Grill, Inc. (NYSE:CMG) announced that CEO Brian Niccol would be leaving the company to become the CEO of Starbucks. Brian has led a superb turnaround at Chipotle, which has put the company firmly on the path of sustainable long-term growth. While we are disappointed to see Brian go, one of the measures of a great CEO is the company that he leaves behind. Brian has built an extraordinary team at Chipotle that we expect will not lose a step in his departure. We are grateful to Brian for the extraordinary value he has created for CMG shareholders and Pershing Square.

Chipotle delivered outstanding results in the first half of 2024 as the brand’s industry-leading value proposition of fresh food, customization, and convenience at fair prices continues to resonate with customers. During the second quarter, same-store sales grew an impressive 11%, or 55% from 2019 levels. Successful marketing, including the return of the fan-favorite Chicken Al Pastor limited time offering, and faster throughput drove transaction growth of over 8%, with gains across all income cohorts. Although sales growth has moderated in the summer amid a broader deceleration in the restaurant industry, Chipotle continues to gain share. The launch of Smoked Brisket for a limited time starting in September, one of the company’s most requested menu items, should further improve trends….” (Click here to read the full text)