initial public offerings (IPOs) trading on American exchanges

Thursday, November 20, 2014

Habit Restaurants (HABT) began trading on the NASDAQ on 14 November 2014

Shares of Habit Restaurants (HABT) more than doubled in their trading debut, underscoring the growing appetite among investors for stocks of fast casual restaurant chains - increasingly, the choice of health-conscious diners.
  • The Habit Burger Grill or just The Habit as it is commonly known, is a fast casual restaurant chain focused on hamburgers, salads, sandwiches, shakes, and french fries, with its headquarters in Irvine, California. Wikipedia
  • Founded: 1969, Santa Barbara, CA
  • CEO: Russell William Bendel

Restaurants such as El Pollo Loco (LOCO) and Zoe's Kitchen (ZOES), which also made their public debut this year, have caught diners' imagination with fresh ingredients and options like whole wheat and gluten-free foods.

That has sent growth-hungry investors scouting for the next Chipotle Mexican Grill (CMG).

Including Habit, known for its charburgers, five restaurant operators have raised about $486 million in U.S. IPOs this year, compared to $231 million raised by two restaurants last year.

All but one of this year's debutantes are fast casuals.

Shares of Zoe's Kitchen, which shot up 74 percent in their debut in April, have more than doubled since then, and El Pollo Loco's are near that mark.

Zoe's shares are trading at 351.34 times forward earnings, and El Pollo at 48.92 times forward earnings, compared with 15.94 times for McDonalds's Corp (MCD) and 38.73 times for the overall restaurant sector, according to StarMine.

J. Alexander's Holdings Inc has filed for an IPO, and Shake Shack is reported to have picked banks for an offering.

The investor demand comes handy for fast casual restaurants looking to expand.

Habit, present in only four U.S. states, and Zoe's plan to double the number of restaurants in next four years.

Sales of U.S. fast casual restaurants are expected to exceed $50 billion by 2018, from about $34.5 billion in 2013, according to research firm Technomic.

Not all fast casual operators have been able to sustain the euphoria surrounding their public debuts, because of issues specific to their business.

Potbelly Corp's (PBPB) stock has lost 10 percent of its value since listing in 2013. Papa Murphy's Holdings (FRSH) has lost 17 percent of its value since it May debut.

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