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Should You Buy Chipotle Mexican Grill, Inc. (CMG)?

As industrywide interest jumped, some big names were leading the bulls’ herd. Pershing Square established the most valuable position in Chipotle Mexican Grill, Inc. (NYSE:CMG) and it was followed by Ken Griffin’s Citadel Investment Group, which also initiated a $161.3 million position during the quarter. The other funds with brand new CMG positions are Anand Desai’s Darsana Capital Partners, Christopher James’s Partner Fund Management, and Curtis Macnguyen’s Ivory Capital (Investment Mgmt).

Let’s go over hedge fund activity in other stocks similar to Chipotle Mexican Grill, Inc. (NYSE:CMG). These stocks are Federal Realty Investment Trust (NYSE:FRT), Xilinx, Inc. (NASDAQ:XLNX), D.R. Horton, Inc. (NYSE:DHI), and Extra Space Storage, Inc. (NYSE:EXR). All of these stocks’ market caps resemble CMG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FRT 17 262426 5
XLNX 41 1176907 5
DHI 40 1102977 9
EXR 21 96553 1

As you can see these stocks had an average of 30 funds with bullish positions at the end of September and the average amount invested in these stocks was $660 million. That figure was $1.60 billion in CMG’s case. Xilinx, Inc. (NASDAQ:XLNX) is the most popular stock in this table with 41 funds holding shares. On the other hand, Federal Realty Investment Trust (NYSE:FRT) is the least popular one with only 17 bullish hedge fund positions. Chipotle Mexican Grill, Inc. (NYSE:CMG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Xilinx, Inc. (NASDAQ:XLNX) might be a better candidate to consider a long position.

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