Out Fox The $treet

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.

Shake Shack reported Q4 numbers that beat estimates, but the numbers didn't surpass the high-end estimates. . The high comp sales growth that hit 13.3% during 2015 will cause a big headwind for 2016 growth. . Investors still need to get real on the valuation multiples paid for the stock. . After the close, Shake Shack (NYSE: SHAK ) reported that  Q4 result  surpassed analyst estimates. The beat was hardly surprising considering the top analysts on the stock at Estimize  predicted  an extremely positive earnings outcome. The actual surprise is that the beat was a minimal $0.01 versus the typical beat by far larger levels.  Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer page for 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.

Shake Shack files an updated S1 allowing pre-IPO shareholders to dump up to 26.1 million shares. Even at the recent lows, the stock remains incredibly expensive. Shake Shack faces too much selling pressure to recommend anybody it under this scenario of likely relentless insider sells. Prior to the open on Thursday, Shake Shack (NYSE: SHAK ) filed a S1 allowing pre-IPO insiders to dump up to 26.1 million shares. The filing allows insiders to sell the shares from time to time at what amounts to over $1.2 billion at current stock prices of $47. Read the full article at Seeking Alpha. Disclosure: No positions 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. 

Summary Habit Restaurants reported strong Q1'15 earnings. The company surged to nearly $40 after the release of the turnaround plan by McDonald's. Investors shouldn't chase the stock as the PS multiple gets stretched.    After a solid Q1 earnings report , Habit Restaurants (NASDAQ: HABT ) bounced around until it soared 12.5% on Monday. The premium hamburger joint presumably surged due to the McDonald's (NYSE: MCD ) turnaround plan falling short of expectations , but one has to wonder if it really justifies a surge in the stock price.  Read the full article on Seeking Alpha.   Disclosure: No positions mentioned. Please read 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.