Chipotle 50-for-1 Stock Makes Fast-Food Chain a Wise Investment, According to Experts

In March, Chipotle Mexican Grill’s board approved a 50-for-1 stock split, making it the biggest stock split in New York Stock Exchange (NYSE) history, according to the Associated Press. Now, experts say that the split makes the stock one of the most profitable on the market.

Yahoo! Finance confirms that shares for the fast-food giant have climbed 14% since the split’s announcement, and this jump is presenting a buying window for potential investors.

“This is the first stock split in Chipotle’s 30-year history, and we believe this will make our stock more accessible to employees as well as a broader range of investors,” CFO Jack Hartung said in a press release.

News of this split becoming an investment boon comes amidst the chain’s Q1 2024 reports, which showed revenue growth of 14.1%, a same-store sales gain of 7%, and the opening of nearly 50 new locations. The Q1 2024 growth came right after the 2023 revenue increase of 14.3%.

The profitability of the Chipotle stock may also have something to do with a major institutional investment.

A significant institutional investor, Public Sector Pension Investment Board, increased its ownership of Chipotle Mexican Grill, Inc. by 11.8% back in March, shortly before the announcement of the stock split. Holdings Channel reported on this new initiative in its third-quarter report. According to the restaurant giant’s SEC filing at the time, the investment board currently holds 2,955 shares of its stock, which was recently valued at roughly $5,413,000.

This increase in holdings is consistent with other hedge funds’ comparable moves. During the fourth quarter, Norges Bank made a significant acquisition that was estimated to be worth $450,560,000. Likewise, Moneta Group Investment Advisors LLC invested over $248,604,000 when it joined the fight.

These actions show that Chipotle’s prospects are beginning to garner more trust amongst major banks, which translates to the public their confidence in the investment.

Important stock trades have also involved important insiders of Chipotle Mexican Grill. For example, CEO Brian R. Niccol recently offloaded 1,100 shares, while insider Roger E. Theodoredis sold 898 shares. These kinds of transactions are frequently watched since they can reveal how confident people are in the organization.