September 20, 2016

Adding Chipotle to my Best Ideas List

Chipotle Mexican Grill's shares have declined all week after the announcement early this week that Bill Ackman's Pershing Square has taken a 10 percent position. The shares initially rose to over $444 and are now at $411.80.

I have steadily added to this (speculative) long on weakness. I do not shun in response to the last few days' underperformance; I look at this as an intermediate-term opportunity.

I am placing CMG on my Best Ideas List at $413 as the reward versus risk has now turned quite attractive.

Here is my projected 12-month updated upside/downside:

Upside $525 (+27%)

Downside: $385 (-7%)

Here is my investment thesis.

This is a speculative long, from my perch.

Position: Long CMG.