MARKET REVIEW

U.S. equities markets were highly volatile, unsettled by U.S.-China trade discord, softening economic growth in the U.S., Europe, China, and geopolitical uncertainty.

Affected by tariffs, industrial, agricultural, and transportation sector activity deteriorated. New threats and escalating rhetoric caused growing concern, and companies across sectors cited trade tensions as the source of heightened caution in planning and investing. The U.S. political landscape was likewise unsettled, as investigations of interference in the 2016 presidential election unfolded, impeachment proceedings against President Trump began, and the 2020 election cycle ramped up.

U.S. economic activity showed signs of tempering, with job growth and

Activist investor Bill Ackman (Trades, Portfolio)’s Pershing Square Capital Management recently released its portfolio update for the third quarter. During the quarter, the hedge fund sold out of its position in Automatic Data Processing Inc. (ADS). It also added more shares of Berkshire Hathaway Inc. (BRK.B) and slightly trimmed its holdings in Chipotle Mexican Grill Inc. (CMG), Hilton Worldwide Holdings Inc. (HLT), Restaurant Brands International Inc. (QSR) and Lowe's Companies Inc. (LOW).

The fund holds shares in seven companies, comprising an equity portfolio valued at $6.27 billion as of the quarter’s end. Founded by Bill Ackman

Papa John’s International Inc. (PZZA) is a gem with a turnaround opportunity at an attractive valuation. While it is a great franchise business with a strong brand name, it's reputation has been tarnished. This should pass, however, under the right managment. The company has a new CEO who is right for the job. The blue-sky scenario for the pizza chain is far beyond a short-term turnaround.

Details

I first came across Papa John’s a year ago when I went through the “Manual of Ideas” created by GuruFocus. I browsed all small-cap stocks and picked just a handful of companies that

In light of factors such as measured undervaluation, cost-cutting efforts, sector growth and recent price rebound, investors may have reason to believe that companies such as Starbucks Corp. (SBUX), Chipotle Mexican Grill Inc. (CMG) and Alliance Data Systems Corp. (ADS) will exhibit share price growth in the future. However, there are several factors that indicate this optimism may be misplaced. We will take a closer look at these three companies, focusing on their strategies for growth and some signals to keep an eye out for.

Starbucks

This iconic café was founded in Seattle in 1971. Since then, it has become

Chipotle Mexican Grill Inc. (CMG) recently reported results for the third quarter of fiscal 2019.

Revenue for the quarter increased by 15% to $1.4 billion. Growth was attributable to a 3% year-over-year increase in the number of restaurants, as well as an 11% increase in comparable store sales (comps). The increase in comps was driven by traffic (contributed 7.5 points) and an increase in price / mix as a result of menu price increases implemented last year (contributed 3.5 points). As shown below, the company’s comps have consistently improved over the last two years and have been in the double

On Tuesday, a day where major fast-food chains like McDonald’s Corp. (MCD) and Chipotle Mexican Grill Inc. (CMG) report earnings, three stocks that have outperformed the Standard & Poor’s 500 Index by at least 5% over the past six months and have increasing gross margins according to the All-in-One Screener are McDonald's, Wingstop Inc. (WING) and Yum Brands Inc. (YUM).

Major Pershing Square holding Chipotle reports earnings

Chipotle, a major holding of Bill Ackman (Trades, Portfolio)’s Pershing Square Capital Management, said third-quarter revenues were $1.4 billion, up 14.6% from the prior-year quarter. Despite this, shares declined

U.S. stocks were in the green on Monday, reversing Friday's decline. The Dow Jones Industrial Average rose 0.48% to 26,949, the S&P 500 index gained 0.56% to 2,978 and the Nasdaq Composite Index swelled 0.76% to 7,999.

Shares of Thor Industries Inc. (THO) gained more than 16% on Monday after announcing fourth-quarter results. The company posted earnings of $1.67 per share on $2.31 billion in revenue. The company beat earnings estimates by 27

U.S. stock market indexes were in the green on Tuesday, but oil prices retreated after Saudi Arabia said it will restore a third of its lost oil output following the attacks this past weekend. The Dow Jones Industrial Average gained 0.13% to 27,110, the S&P 500 index rose 0.26% to 3,005 and the Nasdaq Composite Index advanced 0.40% to 8,186.

Shares of Apogee Enterprises Inc. (APOG) jumped more than 11% on Tuesday after announcing second-quarter results. The company posted earnings of 72 cents per share on $357 million in revenue. The company beat earnings estimates by 9 cents and revenue

According to GuruFocus' list of 52-week highs, these guru stocks have reached their 52-Week Highs.

Xcel Energy Inc. (XEL) reached the 52-week high of $63.54

Xcel Energy manages utilities serving 3.6 million electric customers and 2 million natural gas customers in eight states. Its utilities are Northern States Power, which serves customers in Minnesota, North Dakota, South Dakota, Wisconsin and Michigan; Public Service Company of Colorado; and Southwestern Public Service Company, which serves customers in Texas and New Mexico. Its business mix is about 90% electric and 10% natural gas.

The price of Xcel Energy

CMG (NYSE:CMG) has appreciated 89% this year, making it the top performing stock in the S&P 500 index, more than doubling in value since we made our initial investment three years ago. While year-to-date results have been impressive, management emphasized throughout the second quarter call that the company is in the early stages of many of their key growth initiatives and that this was “just the beginning.”

Chipotle reported another outstanding quarter as solid execution on management’s strategic growth initiatives continues to drive improved business fundamentals. Same-store sales grew 10% in the second

Tom Gayner (Trades, Portfolio) sold shares of the following stocks in the second quarter.

The guru curbed his Oaktree Capital Group LLC (OAK) stake by 66.03%. The trade had an impact of -0.59% on the portfolio.

The asset management company has a market cap of $8.10 billion and an enterprise value of $14.69 billion.

GuruFocus gives the company a profitability and growth rating of 5 out of 10. While the return on equity of 16.29% is outperforming the sector, the return on assets of 2.42% is underperforming 67% of companies in

Dow stocks was higher on Monday, with 3M Co. (MMM) and Johnson & Johnson (JNJ) pulling the index up. The Dow Jones Industrial Average gained 0.15% to 27,234, the S&P 500 index fell 0.16% to 3,020 and the NasdaqComposite Index dipped 0.51% to 8,288.

Shares of Anadarko Petroleum Corp. (APC) slid more than 0.5% after the company announced second-quarter results. It posted earnings of 51 cents per share on $3.44 billion in revenue, reflecting 4.6% growth

Chipotle Mexican Grill Inc.'s (CMG) financial prospects could be enhanced by its investments in digital growth opportunities. The quick-service restaurant is seeking to improve the customer experience through its increasing focus on innovation, while aligning itself with changing consumer tastes.

Although the company’s stock has climbed 64% versus a gain of 7% in the last year for the S&P 500, it offers further upside.

Innovative strategy

Chipotle’s investments in its loyalty program could catalyze its sales performance. The program has 5 million members following its launch in the first quarter of 2019, with early results

Fast-food chain McDonald’s Corp. (MCD) reported strong second-quarter earnings before the opening bell on Friday, pushing shares to an all-time high of $218.15 in premarket trading.

The popular Chicago-based restaurant posted adjusted earnings of $2.05 per share, which were in line with Refinitiv’s estimates. While revenue grew 3% on a constant currency basis from the prior-year quarter to $5.34 billion, topping expectations of $5.33 billion, the company said net sales were negatively impacted by its refranchising initiative. Although selling corporate-owned stores to franchisees helped cut costs, accounting differences hurt reported revenue.

Global same-store sales

Shares of Caterpillar Inc. (CAT) fell 4% after the company posted second-quarter results on Wednesday morning. Revenue grew 3% from the prior-year quarter to $14.43 billion, falling $40 million short of estimates. The company posted earnings of $2.83 per share, missing analysts' estimates by 28 cents.

"Sales and revenues increased this quarter, including a record performance from Construction Industries, which reflected our strong competitive position globally," Chairman and CEO Jim Umpleby said.

For the quarter, the operating profit was $2.213 billion, up 2% from the prior-year quarter. The increase was the result of favorable price

It was a tough few years for investor Bill Ackman (Trades, Portfolio). But the Pershing Square founder got back on track, and then some, this year.

For the first seven months of 2019, Ackman posted gross performance of 46.0%, putting Pershing on course for its best year ever. Missteps into companies such as embattled Valeant Pharamaceuticals (BHC) had undermined performance in the previous four years, leading to losses and the firm’s worst year ever when it declined 20.5% in 2015.

Several elements led to Pershing’s turnaround. Ackman sold his remaining shares of Valeant (now Bausch Health Companies

Shares of fast-casual restaurant chain Chipotle Mexican Grill Inc. (CMG) are up about 50% since the start of the year.

The stock topped $718 on May 20, but has since pulled back to trade at about $667 per share.

The performance follows last year’s impressive gain of 57%. Based on current analyst predictions, it looks like Chipotle still has some room to run in the coming years.

The current consensus analyst price estimate of about $820 to be realized within the next 12 months implies an upside potential

CMG’s (NYSE:CMG) first quarter results continued to demonstrate the significant progress that CEO Brian Niccol and his team have made in dramatically improving performance and positioning the company for long-term sustainable growth. Same-store sales grew 10% in the quarter led by transaction growth of approximately 6%, a significant acceleration in sequential growth – better than that of any other large publicly traded restaurant company.

Management raised its full year same-store sales guidance to mid-to-high single-digit growth from mid-single- digit growth. Digital sales doubled from the prior year quarter to nearly 16% of sales, including robust growth in delivery, which

PayPal Holdings Inc.'s (PYPL) growth strategy has the potential to deliver improving profitability over the long run.

The company’s dominant position within the fast-growing mobile payments industry could catalyze its bottom line, while improved services may help to differentiate its offering.

Partnerships may also play a significant role in its future prospects, while recent investments in South America could enhance its competitive position in fast-growing markets.

Although it has a high valuation, the company’s long-term growth potential means that it could continue to outperform the S&P 500, having risen 40% in the last year versus 4% for the index.