Out Fox The $treet

Shake Shack continues to sell off following the absurd valuations achieved shortly after the IPO. The stock still trades at expensive multiples compared to other high-valued stocks in the sector without offering the faster growth. Shake Shack doesn't yet offer a compelling valuation proposition, even after the nearly 50% decline from the peak. It is hard to explain why the market does it, but over and over great companies get valued at absurd valuations. The scenario is now playing out with Shake Shack (NYSE: SHAK ) . The ultra-hot burger joint saw the stock initially trade after the IPO in the $40 range and surge to over $95 within months. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Summary Habit Restaurants surprises analysts with strong comps. The company filed for selling shareholders to unload roughly 22% of outstanding shares. The combination of the news provides an ideal time to buy a premier restaurant concept. After the close on Tuesday, Habit Restaurants (NASDAQ: HABT ) released a couple of items that make investing in recent IPO stocks very unpredictable. Smashing conservative guidance while at the same time launching a secondary offering will likely leave the stock spinning in place for some time . The fast casual burger joint has traded mostly flat after the initial IPO hype wore off and investors question the valuation. Read the full article at Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Even though the Image Activation program has only begun to start in earnest, Wendy's ( NASDAQ: WEN     ) has already generated a habit of beating expectations. In reality, the restaurant chain hasn't generated mind-boggling comps growth yet, but Wendy's has been performing better than management's plan expected. When the investment community has confidence in a company's plan, the company's stock tends to perform better. In 2012, Wendy's undertook its Image Activation plan to modernize the look of its restaurants and spent heavily to innovate new products that included the pretzel bun. The 6,550-store restaurant chain has seen its stock appreciate roughly 100% in the last year on improved results and excitement over the updated corporate strategy. Read the full article here . Disclosure: No position mentioned. Please review the disclaimer page for more details. 

At the recent investor presentation in June, Wendy’s (NASDAQ: WEN ) gushed about all the positives of brand reimaging, bringing amazing benefits to updated stores. In fact, some of the initially updated stores saw a 25% increase in revenue that came from higher traffic, as prices haven’t been raised. Wendy’s is a well-established QSR burger brand with around 6,500 restaurants, of which around 22% are company-owned. Anybody more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Wendy's (WEN) has long had good fast-food, but the decor has been outdated for well over a decade now. The fact that the old stores still require waiting inline for a refill is very outdated. At least for my family, Wendy's has become a drive through store with no appeal for dining in. Possibly this new makeover will make it more appealing. Has anybody visited an updated location? Disclosure: No position mentioned. Please review the disclaimer page for more details.