Market Overview

How Does Bill Ackman's Chipotle Stake Compare To Other Activists In The Fast Casual Sector?

How Does Bill Ackman's Chipotle Stake Compare To Other Activists In The Fast Casual Sector?

Shares of Chipotle Mexican Grill, Inc. (NYSE: CMG) gained almost 6 percent Wednesday, after Bill Ackman’s Pershing Square disclosed a 9.9 percent stake in the restaurant operator.

It should be noted that the 2,882,463 shares position has an activist nature, as suggested by the 13D SEC filing’s content. Pershing Square believes Chipotle offers a "strong brand, differentiated offering, enormous growth opportunity, and visionary leadership," at an attractive, discount valuation.

What's interesting about Ackman's move is the industry it's in. Benzinga has noted that, thus far, the fast casual space is relatively untouched by big activists. Let's take a look into some other related companies, and analyze some of the largest hedge fund investors.

As of the end of Q2 2016:

  • Potbelly Corp (NASDAQ: PBPB) counted on the support of Jim Simons' Renaissance Technologies, which held more than $21 million in stock, and Bill Miller’s Clearbridge, with 599,894 shares. While none of the top institutional shareholders were activists, there is at least one activist hedge fund among the company’s supporters: Blue Clay Capital Management, Adam Wright and Gary Kohler last disclosed ownership of 121,613 shares.
  • Miller’s Clearbridge was among the largest institutional investors in Noodles & Co (NASDAQ: NDLS). Also involved in the company was activist Ken Griffin’s Citadel Advisors. Its stake only comprised less than $350,000 in options.
  • Jack in the Box Inc. (NASDAQ: JACK) does count at least one activist among its main shareholders: Ken Griffin. As of June 30, Citadel held 492,914 shares of the company, or roughly $42.3 million in stock.
  • With Panera Bread Co (NASDAQ: PNRA), Citadel was an investor as of June 30. Its $7.4 million stake (which barely positions it among the top 100 institutional shareholders) doesn't provide Griffin with the leverage needed to have influence over the Board.
  • For Shake Shack Inc (NYSE: SHAK), Joseph Caruso’s Select Equity Group filed a 13D with the SEC disclosing an activist position comprising 1.61 million shares or about 4.4 percent of the company about a month ago.
  • Finally, with Fiesta Restaurant Group Inc (NASDAQ: FRGI) Citadel made it to the list of top institutional shareholders, owning over $8.6 million in stock.

Related Articles (CMG + PBPB)

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