Shake Shack (NYSE: SHAK): Get Rich and Eat a Burger!

Shake Shack and the Quest for Ethical Investing

Written by Brian Hicks
Posted February 20, 2015 at 2:36PM

shackmoI arrived at Shake Shack (NYSE: SHAK) two minutes before an enthusiastic crew of workers started their shift.

A line had already formed, and the sweet smell of meat and grease floated like cotton clouds below my wind-chapped nose. Although I had devoured a massive bowl of organic steel cut oatmeal three hours earlier, my body was sending me a signal that it needed a healthy dose of B-12. Certainly a burger would do the trick.

The new Shake Shack in Baltimore hasn't even been open for a week, but it's as if the entire working population in the downtown business district heard they were giving out free gold coins and full release massages.

Even in this weather, while the mercury stubbornly sticks below 20 degrees Fahrenheit, folks are actually waiting in lines that stretch outside of the restaurant and into the polar vortex.

This is why I decided to show up before the zombies of the apocalypse showed up with their company cards and salivating mandibles.

It was a simple order: A ShackBurger and a small blueberry pie custard dessert. I went with this sugary treasure because the blueberry pie was sourced from local pie maker Dangerously Delicious Pies.

The burger hit the spot, as did the custard, and my soul felt OK.

Quality and Ethics

If you're a regular reader of these pages you know I make no apologies for my desire to do business with companies that are aligned with my values. As well, I continue to maintain that food stores and restaurants which embrace sustainability as a real and integral part of their business models will typically perform quite well.

This has been the case with Whole Foods (NASDAQ: WFM), this has been the case with Chipotle (NYSE: CMG), and I believe this will be the case with Shake Shack, too.

No matter how you slice it, there's a very real, and incredibly vibrant market segment that demands quality and ethics. And this market segment will rally around any restaurant that delivers. Shake Shack is no exception.

In the meantime, I maintain that other recent IPOs, like Potbelly (NASDAQ: PBPB) and Noodles & Company (NASDAQ: NDLS), offer no real value for customers, and therefor, no real value for investors.

Certainly these charts tell that story quite well …

getinmapotbelly

oodlesandoodles

Ouch!

Don't sleep on sustainability, my friends. It will serve you well, if you let it.