In short: The second peer multiple in the Dutch Bros valuation argument: "Shake Shack, the burger shack, trades at 52 times earnings." No view on Shake Shack itself.
52:13— Shake Shack, the burger shack, trades at 52 times earnings. So — none of those stocks are doing well either. This just doesn't seem like a JF sector. Yeah. — So I find it very interesting that you're sniffing around in this neighborhood. — Well, if it grows at 20% a year, it means it will double in about three and a half years.
In short: Initiated Outperform at RBC with an $89 target; Belski owns it and calls the bottom. "Shake Shack is to us more of a thematic play. I think Shake Shack is to Gen Z what Chipotle was to millennials. The headwinds of beef prices are being quite frankly mitigated with respect to their higher margin business, with respect to the kiosks and the drive throughs. And I think Shake Shack is a secular play on that… down 30%… the last couple months. So I think the bottom is in place." He classes it as "a midcap discretionary name that has a secular theme behind it" — while conceding restaurants generally "are very tough stocks to own."
Shake Shack got a fresh Outperform rating from RBC with an $89 target. Belski, who owns it, buys it as a demographic bet rather than a restaurant: it is to Gen Z what Chipotle was to millennials — the brand a generation adopts as its default.
On the numbers, the obvious problem is beef, which has been expensive. His answer is that the company is offsetting the ingredient cost with higher-margin ways of taking the order — self-service kiosks and drive-throughs, which cost less to staff per sale. Combined with a stock down 30% in a couple of months, he thinks the low is in.
Worth holding alongside his own general warning in the same breath: restaurants are hard businesses and hard stocks to own. He is making an exception, not a rule.
In short: Up 12% after Starboard's Jeff Smith said on Bloomberg TV that the firm had built a stake "worth several hundred million dollars." His discipline is explicit: "I personally didn't think that Shake Shack was that cheap… when you get a big rally like that, I wait for it to calm down, then I buy the shares when they're unchanged on the pre-announcement level" — i.e. back at the unaffected price, ahead of the activist actually changing the board, forcing a buyback or asset sales. Not a position yet.
Shake Shack jumped 12% after Starboard Value's Jeff Smith revealed on television that his activist fund had built a stake worth several hundred million dollars. Activists typically push for board changes, buybacks or asset sales, which is why the market pays up on the announcement.
Singh's discipline here is the transferable part. He does not chase the pop — he waits for the stock to drift back to what's called the unaffected price, meaning where it traded before the announcement, and buys there. That way he owns the shares ahead of anything the activist actually accomplishes, rather than paying in advance for it. He also notes he didn't think the stock was cheap to begin with.
Full passage: premium transcript (PDF).
In short: Giving back about 5% of yesterday's Starboard pop; Mizuho lifts its target to 90 from 80. Brown recaps: "they had a good earnings report, the stock was already rallying, and then the news of the activist got people excited — because the truth is it's a $2 to $3 billion market cap. It's way too small of a company relative to the size of its global brand. It should be much bigger. They need to get better operating the business. The good news is the turnarounds Starboard has done elsewhere in the sector are very instructive to look at and say, hey, what if that happens here?"
Shake Shack gave back about 5% of the previous day's activist pop, and Mizuho lifted its target to $90. Josh Brown's summary of why it moved: a good quarter had already started the rally, and Starboard's stake supplied the catalyst. The mismatch he keeps returning to is size — a global brand carrying only a $2–3 billion market value. "It should be much bigger. They need to get better at operating the business," and Starboard's record fixing exactly that in other restaurant chains is what investors are now pricing.
In short: Up ~11% intraday: Starboard's Jeff Smith told Bloomberg he's taken a several-hundred-million-dollar stake, calling it "too cheap," and may now be the largest holder (unconfirmed; 13Fs next Friday). Josh Brown, a long-time shareholder, phoned in: a stated trajectory to 1,500 stores, 65 openings this year, "a great royalty business internationally," an unbelievable product and a loyal base — "what's missing? It's a $2 billion market cap. Clearly the potential does not match the progress in the share price." Starboard's QSR record (Darden, Papa John's) is "unimpeachable… this may be exactly what the doctor ordered," and he'd bet on constructive conversations already under way ending in a board seat. What needs fixing: last quarter's surprise loss blamed on paper-goods and red-meat costs (~$6.75/lb beef) — "you should not have a business this mature that shocks Wall Street to this extent." Terranova: "a paradigm shift… Jeff Smith and the Starboard team have excelled in quick-serve restaurant activism" — Darden 2014, the entire 12-member board replaced, +143% over the next five years; and the Olive Garden detail he remembers, that Starboard made them salt the pasta water. "He will be active here, he will be engaged, and I would imagine he's going to be on board."
Activist investor Jeff Smith of Starboard Value revealed a several-hundred-million-dollar stake in Shake Shack, calling the stock "too cheap" — possibly making Starboard the largest shareholder. The stock jumped about 11%.
Josh Brown, who owns it, frames the gap: Shake Shack has prime locations everywhere you'd want them, a plan to reach 1,500 stores, 65 openings this year and a profitable international franchise-royalty business — yet the whole company is worth only ~$2 billion. "The potential does not match the progress in the share price." What went wrong is operational, not strategic: last quarter the company shocked investors by swinging to a loss, blaming the cost of paper goods and beef. A mature restaurant chain shouldn't be surprised like that, which is exactly the kind of problem an activist fixes.
Joe Terranova's point is that Starboard specialises in this. At Darden in 2014 they replaced the entire twelve-person board and the stock rose 143% over the following five years; Jeff Smith personally ran the Papa John's turnaround as executive chairman. His favourite detail on how granular they get: Starboard made Olive Garden start salting the water it boiled its pasta in. Both expect a board seat.
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.