News

Chipotle Blowout Quarter Great for T.Rowe Price & Fidelity Investors

Jul 22, 2014

Chipotle Mexican Grill (CMG) clobbered earnings estimates by $.42 and reported profits of $3.50 per share in the second quarter. Sales rose 28.6% to $1.05 billion, beating views for $989.55 million, marking the third straight quarter of faster revenue growth.

The number that was really surprising was the 17% plus same-store sales growth, blowing out Wall Street’s expectations of 10.5%. This was a solid report considering how tough the company’s first quarter was, when it missed earnings estimates amid higher food costs. The company did respond to the poor results by raising menu prices an estimated 5% to 6.5% to offset those costs.

Mutual Funds to Benefit

Some of the mutual funds that should benefit from Wall Street’s positive reactions include a couple of T.Rowe Price funds:

T. Rowe Price Growth Stock Fund (PRGFX) owns 707K plus shares, or 2.27% of CMG shares.
T. Rowe Price Blue Chip Growth Fund (TRBCX) owns 521K shares, or 1.68% of CMG shares.

The Fidelity funds are also prominently positioned in shares of Chipotle, with two funds standing out.

Fidelity Contrafund (FCNTX) has the largest position of all mutual funds that own Chipotle shares, owning 1.65M shares or 5.31% of all shares.

Fidelity Growth Company Fund (FDGRX) also owns nearly 320K shares or 1.04% of shares.

Several funds from the Vanguard Family had significant ownership in Chipotle shares as well.

The Bottom Line

For mutual fund investors, finding fund managers that can spot consistent and sustainable growth plays is a key part of successful long-term investing!