SHAK: Adding Shake Shack to Investing Ideas (Short Side)

07/22/20 10:40AM EDT

Hedgeye CEO Keith McCullough is adding Shake Shack (SHAK) to the short side of Investing Ideas. Below is a brief note.

Looking to re-short a great short that's up this morning on no volume? Enter Howard Penney's Shake Shack (SHAK) short idea. 

Here's what Consumables analyst Howard Penney wrote about the SHAK (a lot higher) in FEB:

Takeaway: SHAK is on the Hedgeye Best Idea list a SHORT

To be LONG SHAK today means you like aggressive unit growth.  If you are short SHAK, you are short because of the aggressive unit growth and appreciate the complexity that comes with this strategy.  In the end, complexity is the silent killer of growth, and those issues are apparent at SHAK.  Outside of aggressive unit growth, there are zero reasons to be LONG SHAK.

SHAK is aggressively (poorly) run, low margin, low return, high multiple company.

Reiterated on green,

KM

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.