Reviewing The Case For Shake Shack Inc. (SHAK) Going Higher


    BlackRock Fund Advisors recently announced the acquisition of new stake in Shake Shack Inc. (NYSE:SHAK). The institutional investor has increased its shareholding in the Consumer Cyclical company by 17.23% to 4.79 million shares with purchase of 0.7 million shares. This fresh investment now brings its stake to 12.55% valued currently at $232.58 million. In addition, The Vanguard Group, Inc. raised its holdings by 0.63 million to 3.64 million shares. And Gilder, Gagnon, Howe & Co. LLC has lifted its position by 35.75% or 0.79 million shares – to 2.99 million shares.

    With over 1.49 million Shake Shack Inc. (SHAK) shares trading Monday and a closing price of $68.25 on the day, the dollar volume was approximately $101.78 million. The shares have shown a positive weekly performance of 17.45% and its price on 08/31/20 gained nearly 1.19%. Currently, there are 37.31M common shares owned by the public and among those 30.67M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 19 analysts who have offered their price forecasts for SHAK have a consensus price objective of $53.29. The analysts have set the share’s price value over the next 12 months at a high of $77.00 and a low of $45.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Shake Shack Inc. stock is 2.80 for the next 12 months. The average price target is -27.67% below its last price level and a downside to the estimated low will see the stock lose -51.67% over that period. But an upside of 11.36% will see the stock hit the forecast high price target while mean target price for the stock is $51.50.

    Insiders at the company have transacted a total of 77 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 29 of these insider trades were purchases, accounting for 240,265 shares. Insider sales of the common stock occurred on 48 occasions, with total insider shares sold totaling 1,432,020 shares.

    The top 3 mutual fund holders in Shake Shack Inc. are iShares Core S&P Small Cap ETF, Vanguard Total Stock Market Index, and Alger Funds – Small Cap Focus Fun. iShares Core S&P Small Cap ETF owns 2.19 million shares of the company’s stock, all valued at over $106.42 million. The company bought an additional 13777.0 shares recently to bring their total holdings to about 5.74% of the shares outstanding. Vanguard Total Stock Market Index sold 390.0 shares to see its total holdings shrink to 1.04 million shares valued at over $50.56 million and representing 2.73% of the shares outstanding. Alger Funds – Small Cap Focus Fun bought 0.41 million shares to bring its total holdings to over 1.02 million shares at a value of $49.64 million. Alger Funds – Small Cap Focus Fun now owns shares totaling to 2.68% of the shares outstanding.

    Shares of Shake Shack Inc. (NYSE: SHAK) opened at $67.94, up $0.49 from a prior closing price of $67.45. However, the script later closed the day at $68.25, up 1.19%. The company’s stock has a 5-day price change of 17.45% and 27.57% over the past three months. SHAK shares are trading 14.57% year to date (YTD), with the 12-month market performance down to -31.17% lower. It has a 12-month low price of $30.01 and touched a high of $105.84 over the same period. Currently, 1.49 million shares have been traded, compared to an average intraday trading volume of 1.47 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 23.69%, 28.85%, and 23.29% respectively.

    Institutional ownership of Shake Shack Inc. (NYSE: SHAK) shares accounts for 80.61% of the company’s 37.31M shares outstanding. Mutual fund holders own 62.43%, while other institutional holders and individual stakeholders account for 9.65% and 39.46% respectively.

    It has a market capitalization of $2.46B and a beta (3y monthly) value of 1.65. The earnings-per-share (ttm) stands at -$0.21. Price movements for the stock have been influenced by the stock’s volatility, which stands at 5.10% over the week and 4.73% over the month.

    Analysts forecast that Shake Shack Inc. (SHAK) will achieve an EPS of -$0.2 for the current quarter, -$0.11 for the next quarter and $0.1 for 2021. The lowest estimate earnings-per-share for the quarter is -$0.32 while analysts give the company a high EPS estimate of -$0.02. Comparatively, EPS for the current quarter was $0.26 a year ago. Earnings per share for the fiscal year are expected to increase by 18.20%, and 113.90% over the next financial year.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 19 brokerage firm advisors rate Shake Shack Inc. (SHAK) as a “Moderate Buy” at a consensus score of 2.80. Specifically, 3 Wall Street analysts polled rate the stock as a buy, while 14 of the 19 advise that investors “hold,” and 2 rated it as a “Sell.”

    Looking at the support for the SHAK, a number of firms have released research notes about the stock. Wedbush stated their Outperform rating for the stock in a research note on August 20, 2020, with the firm’s price target at. BTIG Research coverage for the Shake Shack Inc. (SHAK) stock in a research note released on April 21, 2020 offered a Neutral rating with a price target of. Credit Suisse was of a view on April 03, 2020 that the stock is Neutral, while Goldman gave the stock Neutral rating on March 20, 2020, issuing a price target of $100- $40. SunTrust on their part issued Hold rating on February 21, 2020.


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