September 30, 2016 / 7:05 PM / 3 years ago

Fidelity Contrafund continues to slash stake in struggling Chipotle

A Chipotle Mexican Grill is seen in Los Angeles, California, U.S. on April 25, 2016. REUTERS/Lucy Nicholson/File Photo

BOSTON (Reuters) - Fidelity’s Contrafund (FCNTX.O), the largest mutual fund investor in Chipotle Mexican Grill Inc (CMG.N), cut its stake in the struggling burrito chain by 19 percent in August, Fidelity disclosed on Friday.

Run by portfolio manager Will Danoff, Contrafund reported holding about 790,177 shares in Chipotle at the end of August. That was down from about 980,000 shares in the previous month, according to Fidelity fund disclosures.

Fidelity was not immediately available for comment.

Contrafund’s reduced exposure comes as activist investor Bill Ackman works to revive the chain’s sales. Earlier this month, Ackman’s Pershing Square hedge fund disclosed a 9.9 percent stake in Chipotle.

Since the end of 2015 when Contrafund held about 1.95 million Chipotle shares worth $934 million, Danoff has cut the stake by 59 percent.

Chipotle is struggling to revive sales after food-borne illness outbreaks hit the chain. Its share price is down 41 percent in the past year, trading up 1.2 percent on Friday afternoon at $425.74.

Reporting by Tim McLaughlin; Editing by Diane Craft and Jeffrey Benkoe

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