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. 

Yum Brands recently announced a huge increase to the capital return plan. The details of the stock repurchase plan are highly misleading considering the purchases of stock prior to the split of the Yum China business. Once the split takes place, yield investors can better evaluate the deal offered to investors. In the midst of plans to split the China business into a separate company,  Yum Brands (NYSE: YUM )  plans massive capital returns to shareholders. Unlike other typical large-scale capital return plans, the stock actually trades near all-time highs. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details.

After slightly weak guidance following the Q2 earnings report, Zoe's Kitchen (ZOES) has absolutely collapsed. The stock is now down from $38 to the $24 range providing a double bottom opportunity. The valuation is reasonable at $475 million with revenues heading towards $333 million next year.  Check out these other research posts: Zoe's Kitchen: Patience Rewards Investors With Dip Opportunity Opportunities In Restaurant Stocks Disclosure: Long ZOES. 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

Zoe's Kitchen trades back to support near $30 as the stock attracts a lot of shorts and a lethal downgrade. The stock trades at a compelling valuation to the growth rate compared to a peer group. The investment thesis in Zoe's Kitchen is only enhanced by the lack of a compelling reason for the negative thesis on the stock. Suddenly the fast-growing concept of Zoe's Kitchen (NYSE: ZOES ) isn't seeing any love. Short interest is soaring and a negative analyst call sent the stock down to recent lows.          Read the full article on Seeking Alpha.  Disclosure: Long ZOES. Please review the disclaimer page for more details.  Update: Stock provided an incredible buying opportunity hitting a low of $25.86 on Friday. 

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 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

Buffalo Wild Wings is trading near an all-time higher around $200. The wings concept has missed earnings in the last three quarters and is starting to face more aggressive competition. The stock trades at a premium valuation considering the competitive environment and earnings misses.          Back in June, research indicated that Buffalo Wild Wings (NASDAQ: BWLD ) wasn't worth chasing higher. The company was poised to produce better results going forward, but the valuation wasn't very attractive. 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. 

Zoe's Kitchen produced a strong Q1'15 earnings beat. The Mediterranean-themed concept remains attractively valued compared to other restaurant peers with similar growth rates. The stock remains too cheap to pass up, especially with a potential breakout above $35. Another solid quarter and Zoe's Kitchen (NYSE: ZOES ) still trades at a discount compared to other fast-casual stocks that are on fire. The Mediterranean-themed concept fails to grab the market's attention in a similar manner as a Shake Shak (NYSE: SHAK ) or a Habit Restaurant (NASDAQ: HABT ), despite similar growth projections. Read the full article at Seeking Alpha. Disclosure: Long ZOES. Please review the disclaimer page for more details. 

Shake Shack finally cools off after an incredible surge in the stock price. The fabulous burger-joint has a valuation multiple only matched by fast-growing tech stocks that produce revenues gains of over 100%. Investors must not get caught up in the excitement of the Shake Shack concept and focus on the absurd valuation compared to other top fast-casual restaurant concepts. After a massive month-long run, Shake Shack (NYSE: SHAK ) finally took a step back. The fabulous burger joint has an enviable customer base and strong growth prospects, but the recent rally appears more fluff than reality. The stock started April below $50 and surged above $95 last week. Read the full article on Seeking Alpha. Disclosure: No position 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. 

Summary Chuy's offers the unique opportunity for a fast-growing restaurant stock trading at multi-year lows. The Tex-Mex concept remains relatively small with only 61 locations in 14 states. The slowing unit development plan, along with a better real estate strategy, will help ramp up new locations faster and improve margins in 2016. Chuy's stock isn't cheap, but it offers an attractive valuation with annual growth continuing at the nearly 20% clip. With falling oil prices, most restaurant stocks got a boost in consumer spending and higher stock prices. One restaurant concept actually trading near multi-year lows is Chuy's Holdings (NASDAQ: CHUY ) . The concept has seen the stock hammered 50% after a very successful run after the IPO back in 2012. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Summary Potbelly continues a trend of beating estimates while the stock bumps along the bottom. Despite the large stock decline after irrational trading following an IPO, the stock trades at an exceptionally large forward PE ratio. Investors need to keep the stock on a watch list due to the long-term growth potential, but one shouldn't expect the stock to rebound now. After writing about Noodles & Company (NASDAQ: NDLS ) earlier in the week, this article focuses on Potbelly (NASDAQ: PBPB ). Both restaurant concepts had hot IPOs in 2013 and share similar less-than returns, though Potbelly has traded better than Noodles over the last 9 months. Read the full article at Seeking Alpha. Disclosure: No stocks mentioned. Please review the disclaimer page for more details. 

Summary Jack in the Box reported Q3 '14 earnings. The recommendation remains that the concept is attractive, but the valuation is rich. The strong turnaround of the Qdoba concept was not anticipated.          Read the full update at Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.