Bill Ackman’s Long-Term Bet on Chipotle Delivers Impressive Returns

The article discusses Bill Ackman, founder of Pershing Square Capital Management, who is known for his unconventional approach to investing by holding significant stakes in a small number of companies for the long term. Ackman’s strategy has led to impressive returns for his investors, beating the S&P 500 by almost twice over the past five years. As of the end of 2023, Pershing held stakes in just eight stocks, with Chipotle being the largest position, comprising 23% of the portfolio. This fast-food chain has experienced remarkable growth since its IPO in 2006, with a stock price increasing by over 14,000%. Despite some investors viewing risks during a food safety crisis in 2016, Ackman saw potential due to the company’s continued focus on exceptional food and operational excellence. Chipotle has maintained industry-leading same-store sales growth and profitability, resulting in a 40% year-to-date gain in 2024, following a 65% increase in 2023. However, the stock’s current valuation is quite high, suggesting that investors’ expectations are built into the price. Nevertheless, Chipotle’s proven track record and expansion plans offer strong possibilities for future growth. Investors should monitor the stock closely and consider purchasing it during weaker periods. According to the Motley Fool Stock Advisor, while Chipotle did not make their list of top ten investments, other options may yield better returns. Subscribers to Stock Advisor receive guidance on constructing a portfolio, regular updates, and two fresh stock recommendations every month. Since 2002, Stock Advisor’s performance has exceeded that of the S&P 500 by quadruple.