Investors follow hedge fund managers because billionaires who manage money for other rich people are an obvious source of investing inspiration.
Well-known billionaire Bill Ackman leads Pershing Square Capital, which manages $18.6 billion in assets. He's a big fan of Chipotle Mexican Grill (CMG -0.48%), and it's not hard to see why. Chipotle is a no-brainer stock to own that regularly cranks out higher sales and profits, and it has created incredible shareholder wealth. Let's check out how much money he has invested in the burrito king.
Betting big on burritos
Pershing Square owns only 10 stocks, although it's owned even fewer at other times. Ackman has most of the fund's money invested in consumer discretionary stocks. Chipotle is its second-largest holding, behind another restaurant company, Restaurant Brands International. It owns almost 825,000 shares of Chipotle Mexican Grill stock, and this position accounts for nearly 13% of its total portfolio. It also represents almost 3% of shares outstanding. However, it was previously the fund's largest position; Ackman sold off about 130,000 shares in the 2024 fourth quarter. He's sold off shares at other times as well.
The fund first bought shares of Chipotle sometime in the third quarter of 2016, and the stock has soared around 660% since then. However, that success wasn't always a given. Ackman's position testifies to the power of long-term investing. At the time Pershing Square bought it, Chipotle stock was struggling. It lost 21% in 2016 and 23% in 2017.
Ackman had confidence in a turnaround, and the company brought in CEO Brian Niccol in 2018. Chipotle has become one of the top-performing restaurant chains and stocks. The 2024 first quarter was another win, with a 14% revenue increase year over year and $13.09 in earnings per share, a 24% year-over-year increase. Pershing Square held on, and today its position is worth almost $2.7 billion as of Thursday's close.
