Stanley Druckenmiller (Trades, Portfolio) sold out his stake in Chipotle Mexican Grill Inc. (CMG, Financial) in the first quarter.
Chipotle Mexican Grill opened its first restaurant in 1993. Chipotle Mexican Grill restaurants focus on Mexican foods including a menu of burritos, tacos, burrito bowls and salads made using fresh ingredients. The company currently operates 1,971 restaurants throughout the U.S. as well as 11 in Canada, seven in England, four in France and one in Germany as of Dec. 31, 2015. Chipotle Mexican Grill also owns and operates 13 ShopHouse Southeast Asian Kitchen restaurants, a restaurant chain that focuses on specializing in Southeast Asian cuisine.
Chipotle Mexican Grill has a market cap of $12.95 billion, a P/E ratio of 42.96, an enterprise value of $12.7 billion, a P/B ratio of 8.66 and a quick ratio of 1.32.
According to GuruFocus, Chipotle Mexican Grill has strong financials with a 7/10 financial rating with no debt. The company also has a 9/10 profitability and growth rating with revenue growth of 18.50% that ranks the company above 91% of the 240 companies in the global restaurants industry.
Chipotle Mexican Grill is also traded in Germany and Mexico.
Despite the company having strong financials, Druckenmiller may have sold his stake in the company for the following reasons:
- The company is trading well above its current intrinsic value. According to GuruFocus Chipotle Mexican Grill is worth $294.08. This means that the stock is overpriced by 50.49%.
- The company has seen significant losses in its EBITDA growth (-26.50%), Operating Income growth (-33.20%), EPS without NRI growth (-32.80%), free cash flow growth (-49.80%) and book value growth (-25.40%).
- Druckenmiller purchased his original stake in Chipotle Mexican Grill during the fourth quarter of 2015. He purchased 20,200 shares at an average price of $609.30. He most recently sold out his stake during the first quarter at an average price of $475.82, a loss of 22% on his investment.
- It is possible that Druckenmiller decided to sell out his stake in order to cut his losses.
Druckenmiller is a Pittsburgh native who grew up in a middle class family in the suburbs of Philadelphia. Druckenmiller graduated with a B.A. in English and economics from Bowdoin College.
After graduating from college Druckenmiller began working in the investment industry. He landed a management trainee position at Pittsburgh National Bank. Druckenmiller became the chief of research within one year of working at the company. By the age of 26 he was head of investments at Pittsburgh National Bank.
Druckenmiller continued to learn and gain confidence with his research and investment decisions. In 1981, he decided to found his own firm Duquesne Capital Management. Duquesne Capital Management is a privately held investment firm that currently owns 33 stocks with an estimated total value of $1.340 billion.
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