Ensemble Capital Management, an investment management company, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first half of 2024, the strategy increased 8.02% compared to the S&P 500’s 15.29% return. Although the average stock in the S&P 500 has only increased by 5.07% so far this year, the S&P 500 was remarkably up over 15%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Ensemble Capital Management highlighted stocks like Chipotle Mexican Grill, Inc. (NYSE:CMG) in the second quarter 2024 investor letter. Chipotle Mexican Grill, Inc. (NYSE:CMG) owns and operates Chipotle Mexican Grill restaurants. The one-month return of Chipotle Mexican Grill, Inc. (NYSE:CMG) was -14.00%, and its shares gained 31.98% of their value over the last 52 weeks. On July 17, 2024, Chipotle Mexican Grill, Inc. (NYSE:CMG) stock closed at $55.29 per share with a market capitalization of $75.93 billion.
Ensemble Capital Management stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q2 2024 investor letter:
“Finally, we’d like to discuss Chipotle Mexican Grill, Inc. (NYSE:CMG), a nice long term success story in our client portfolios that we recently sold out of due to its high valuation after holding for over 4 years. This was an exit that was driven by the strong performance of the stock, increasing about 370% over the past 4 years from March 2020 to June 2024.
Chipotle has been a very successful stock as a result of the strong business performance of the company. Under Brian Niccol, its CEO since 2018, it has accelerated its growth, improved operations and efficiency, and set its sights on higher goals in bringing its casual healthy Mexican cuisine to all of North America and increasingly, the world.
We first bought the stock in client portfolios in March 2020 on the thesis that there was substantial growth runway and margin leverage in the business as it scaled. The initial reaction of the COVID pandemic shutdowns on the stock was severe, with a nearly 50% drawdown, which provided the opportunity to start buying at prices that we believed offered good future returns. As it turned out, underlying acceleration in demand for Chipotle and its pricing power proved the strengths of its offering and business model shortly after…” (Click here to read the full text)
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Chipotle Mexican Grill, Inc. (NYSE:CMG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held Chipotle Mexican Grill, Inc. (NYSE:CMG) at the end of the first quarter which was 56 in the previous quarter. Chipotle Mexican Grill, Inc. (NYSE:CMG) generated first-quarter sales of $2.7 billion, a 14.1% year-over-year growth. While we acknowledge the potential of Chipotle Mexican Grill, Inc. (NYSE:CMG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Chipotle Mexican Grill, Inc. (NYSE:CMG) and shared Artisan Mid Cap Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
