Jim Cramer Is Feeling Even Better About Buying Chipotle
Valeant Pharmaceuticals (VRX) lost its second-largest shareholder in mid-June when Sequoia Fund sold its position.
However, Valeant's loss was Chipotle Mexican Grill's (CMG) - Get Report gain, said TheStreet's Jim Cramer on CNBC's "Stop Trading" segment. News the fund bought into the fast-casual restaurant chain plus a recent research note from William Blair makes Cramer, the co-manager of the Action Alerts PLUS portfolio, more optimistic on the stock, he said Wednesday.
Cramer has been backing Chipotle shares for quite some time and the research from William Blair gives analysts gives him more confidence in that call. The analysts' surveys show food safety concerns are no longer as much of a worry, particularly in the Northeast.
They also predict comp-store sales will come in around negative 20%. While the decline is still large, it's an improvement from the prior quarter. "That's how it starts," Cramer said of the chain's recovery. "It does not start overnight."
"Those who want to dip their feet in Chipotle, I think it's right," he reasoned.
At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.