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This Big Investor Still Has Faith in Chipotle

January 20, 2016

80 Boston College Students Fall Ill After Eating At Chipotle Restaurant80 Boston College Students Fall Ill After Eating At Chipotle Restaurant
A closed Chipotle Mexican Grill in Boston last DecemberPhotograph by Scott Eisen — Getty Images

Fidelity’s Contrafund, the biggest mutual fund investor in Chipotle Mexican Grill (CMG), held steady in the company during the fourth quarter, even as an outbreak of food-borne illness in the restaurant chain pummeled its shares.

“We held steady our investment in Chipotle, a longtime holding, deciding to hang in there, based in part on management’s focus on productivity and comparable-restaurant sales,” Contrafund portfolio manager Will Danoff said in his most recent commentary for investors. His fourth-quarter update was released this week.

Danoff is one of the mutual fund industry’s most influential investors, running a portfolio with $110 billion in assets. His fund held a 6.29% stake in Chipotle, as of Nov. 30.

Chipotle was the largest detractor to Danoff’s performance in the fourth quarter, when its shares lost about one-third of their value because of the outbreak.

Last month, Chipotle said it may never pinpoint what caused an E. coli outbreak linked to two restaurants in Kansas and Oklahoma, extending a mystery over dozens of illnesses tied to the burrito chain.