Out Fox The $treet

After the close, Chipotle Mexican Grill (CMG) reported earnings that dazzled the market. Yet, the restaurant stock is still recovering from the health scare juicing comp sales for a highly expensive stock

After the market selloff, very few stocks are still overvalued. Chipotle Mexican Grill (CMG) is one of those stocks as the restaurant company continues to trade at extreme premium valuations.

Chipotle announced the restaurant is moving their headquarters from Denver to Newport Beach. The company is shutting down the Denver office and facing substantial re-organization costs. The move does nothing to improve the food with integrity concept desired by customers. Expect EPS estimates to collapse as the company has limited corporate personnel to implement new strategies. Only a few months ago,  Chipotle Mexican Grill  ( CMG ) announced that Brian Niccol would take over as the new CEO from the co-founder. The stock has surged on this news rising $100 now, but my  investment thesis  has maintained that investors need to dump shares on this rally as the most likely outcome is disruption of the business model and cultural change from the hiring of an exec from Taco Bell that was at odds with the people at Chipotle. Today, the new CEO fired the first warning sign on this disruptive period. Read the full article on Seeking Alpha.  Disclo...

As Chipotle Mexican Grill (CMG) becomes a shell of itself by hiring the CEO from Taco Bell and struggling to recover from the health scare, the restaurant concept with the attractive growth prospects now is Shake Shack (SHAK) .

Chipotle Mexican Grill (CMG) is up about 15% today as the market cheers the hiring of a new CEO from Taco Bell. While CEO Brian Niccol was highly successful at Taco Bell, he isn't a good fit for the Chipotle culture. A shift from "food with integrity" will be disastrous to the stock in the short run. Don't forget that JCPenny (JCP) originally cheered the hiring of Ron Johnson and that about killed the retailer as he attempted to change the corporate culture.

Chipotle dips below $300 following highly disappointing Q3 results. The negative EPS trend still signals to avoid the stock. The downward shift in store opening growth will further impact the long-term potential. After the close,  Chipotle Mexican Grill  ( CMG ) reported highly disappointing  Q3 results . The numbers were so bad that my  previous article  questioned whether $300 would hold and now the focus can shift to the $250 level. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Chipotle misses Q2 earnings estimates, but the restaurant concept does return to profits. The company is seeing improving traffic trends from the Chiptopia loyalty program, but the program comes at a high cost. The stock continues to trade at manic levels and far exceed the values of other strong restaurant concepts that don't face food safety issues. Chipotle Mexican Grill (NYSE: CMG )  remains a shell of its prior self in all ways except valuation. The company reported that  Q2 earnings  results missed analyst estimates, yet the stock is bouncing around in the after hours far above $400. The market is holding on to slight traffic improvements from the new loyalty program, when the reality isn't that impressive. Read the full article on Seeking Alpha.  Disclosure: Long ZOES

Shake Shack sailed past Q1 results due an unexceptionally high comp sales. The recent stock dip didn't improve the valuation equation as other restaurant stocks got even cheaper. The recommendation remains to avoid the pricey valuation multiple with legitimate fears that lower comp sales in the near future will sink the stock. The fear with the exceptional growth of Shake Shack  (NYSE: SHAK )  was that the company would eventually face tough compares. Restaurants that grow comp sales at rates above 10% tend to fall victims to themselves with future periods having a difficult time surpassing those numbers to any great extent. Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please read the disclaimer page for more details.

Fiesta Restaurant Group produced disappointing Q1 results highlighted my weak guidance. The company is feeling the growing pains of aggressively pushing the Pollo Tropical concept into several new markets from a South Florida base. The stock now trades at an extremely low valuation multiple providing a gift opportunity. The  quarterly results  for  Fiesta Restaurant Group (NASDAQ: FRGI )  were slightly disappointing, but the stock reaction was extreme. The main restaurant concept is moving from clustered in prime South Florida markets to multiple new markets outside of Florida. The shift provides for lumpy results that the market is extrapolating too much as weakness.  Read the f ull article on Seeking Alpha.  Disclosure: Long FRGI, ZOES. Please read the disclaimer page more details.

Habit Restaurants trades toward the lows following market disappointment with comp sales guidance. The company remains a leader in the premium burger category primed for long-term store expansion. The stock is a bargain trading at a discount to other top restaurant chains. After the recent market rebound,  Habit Restaurants (NASDAQ: HABT )  offers one of the few stocks still trading close to the lows. The premium burger chain disappointed the market with discussions on the  earnings call  around promotional activity in the sector and higher labor costs. Read the full article at Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer page for more details.

The CDC continues to report new cases related to the E. coli outbreak. The new cases are related to the original outbreak dates that ended November 7. Previous health illness cases and valuation concerns suggest avoiding Chipotle Mexican Grill even on the selloff predicted for Monday trading. After the close on Friday, Chipotle Mexican Grill (NYSE: CMG ) updated investors and the news wasn't very good. The restaurant chain that prides itself on serving quality food is having a difficult time shaking the recent E. coli outbreak. Read the full article on Seeking Alpha. Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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. 

Guess this was missed from a few weeks back, but Cramer did an interesting analysis of Zoes Kitchen (ZOES) compared to Chipotle Mexican Grill (CMG) back when it went public. Agree with Cramer that Chipotle will never be matched, but if anybody has a chance of reaching half the size of Chipotle it would be Zoes that grew revenue 54% during Q2. Its worth watching for those interested in the concept. With roughly 130 stores, Zoes has a long runway to hit what is probably a floor of 1,600 units. Disclosure: Long ZOES. Please review the disclaimer page for more details. 

Summary The excitement over El Pollo Loco should point investors back to Zoe's Kitchen. Zoe's Kitchen has very favorable growth numbers. If any stock presents the ability to replicate the growth of Chipotle, it is Zoe's. The surprising success of El Pollo Loco Holdings (NASDAQ: LOCO ) following their IPO last week leaves me wondering why Zoe's Kitchen (NYSE: ZOES ) hasn't seen the same level of excitement. Read the full article at Seeking Alpha. Disclosure: Long ZOES. Please review the disclaimer page for more details. 

Chuy's Holdings ( NASDAQ: CHUY     ) stock launched out of the IPO gate due to the excitement over the potential for the Southwest regional chain to expand nationally. The Austin, Texas-based Tex-Mex chain only operates 48 full-service restaurants and recently expanded into the Carolinas and Ohio. In the past month, the stock has faced selling pressure after the third-quarter earnings report showed declining margins. However, other successful restaurant chains have had periods of weakness followed by huge returns. Fellow Mexican chain Chipotle Mexican Grill ( NYSE: CMG     ) and industry leader Darden Restaurants ( NYSE: DRI     )  share another theme: strong restaurant-level margins while maintaining restaurant growth. Is the recent margin decline a blip for Chuy's due to absorption of all the new restaurant growth or has the company bitten off more than it can chew? Read the full article here . Disclosure: No positions m...

After reviewing the top gainers in the S&P 500 since March 9, 2009 provided by Bespoke Investment Group, one stock really stuck out. Chipotle Mexican Grill ( CMG ) generated one of the largest gains at nearly 1,000% during that period. What really stood out is that Chipotle unlike other stocks on the list was considered a high quality company all along yet it presented several extreme-buying opportunities over those years. Using that same general concept of buying quality stocks on dips, a couple of top performing companies with huge opportunities really stick out. Both Yelp ( YELP ) and Zillow ( Z ) have very desirable, market leading models. The issue is that the stocks trade at high multiples that make the stocks difficult to purchase at the current levels. Following the Chipotle example, the market will provide several opportunities in the future to buy these stocks at lower multiples. The key is whether investors are prepared and ready to pounce when it occu...

Small Cap Insight Over the last couple of years Jack in the Box ( JACK ) has over gone a corporate shift that has helped push the stock higher. Now with the CEO leaving and a store shuffle on going at the Qdoba subsidiary, can the stock shoot even higher? The San Diego based company operates and franchises over 2,250 Jack in the Box (JIB) restaurants in 21 states and around 600 Qdoba Mexican Grill restaurants in 45 states. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

After a recent visit to the local Chuy’s (NASDAQ: CHUY ) restaurant, it became clear that the company is on a successful path. Even arriving after 1pm for lunch, the restaurant had a five-minute wait, an unheard of scenario in this area. The most disappointing part of the lunch was missing that the stock went public last summer and has already gained more than 170% before even putting together the more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Recently Jack in the Box  (NASDAQ: JACK ) disclosed that it would close 67 Qdoba stores for a cost of $40 million in impairment and severance charges. With a turnaround at the Jack in the Box concept, one has to wonder if management knows how to operate Qdoba. The company operates and franchises Jack In the Box restaurants with more than 2,250 restaurants in 21 states. Additionally, the company operates more » Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

After a huge surge in February last year, Buffalo Wild Wings (NASDAQ: BWLD ) has gone virtually sideways. The stock had a huge day on February 7 where it surged from $70 to $82.50 yet the next year has seen nothing but disappointment for investors. The company operates and franchises Buffalo Wild Wings Grill & Bar restaurants with nearly 900 restaurants in 49 states and Canada. The restaurants feature a variety more » Disclosure: No positions mentioned. Please review the disclaimer page for more details.