Shake Shack Inc. has recently witnessed significant activity in its stock ownership, particularly among its directors and institutional investors.
A director now holds 407,646 shares valued at approximately $49.6 million, reflecting a 6.85% decrease in their ownership. This sale is part of a broader trend, as insiders have collectively sold 53,333 shares worth around $6.57 million over the last quarter. Currently, insiders own 9.73% of the company's stock, indicating a substantial level of insider participation in the market.
Institutional trading has also been active, with several investors adjusting their positions in Shake Shack. HSBC Holdings PLC notably increased its stake by 303.3% in the second quarter, acquiring an additional 12,487 shares to reach a total of 16,604 shares valued at $1.46 million. Similarly, Fisher Asset Management LLC raised its position by 4.8% in the third quarter, now owning 354,114 shares worth approximately $36.5 million. Other institutional players, including Charles Schwab Investment Management and FMR LLC, have also increased their holdings, contributing to a robust 86.07% of the stock being owned by hedge funds and institutional investors.
The stock of Shake Shack (NYSE: SHAK) has been a focus for analysts, with recent price targets reflecting a mix of optimism and caution. UBS Group has raised its price target from $130 to $140, maintaining a "neutral" rating, which suggests a potential upside of 6% from the previous close. Truist Financial increased its target from $144 to $147 and maintained a "buy" rating, while JPMorgan Chase & Co. set a lower target of $102, reflecting an "underweight" rating.
The average rating for Shake Shack currently stands at "Hold," with an average price target of $120.50. The stock opened at $132.07 recently, with a market cap of $5.61 billion and a price-to-earnings ratio of 776.88, indicating a high valuation relative to earnings. The company has experienced a 14.7% increase in revenue compared to the same quarter last year, reporting $316.92 million in revenue and earnings per share of $0.25, surpassing analysts' expectations.
Recent insider transactions have drawn attention, particularly the sale of shares by key executives. CFO Katherine Irene Fogertey sold 642 shares at an average price of $137.51, totaling approximately $88,281. This sale represents a 2.05% decrease in her ownership. Additionally, Director Daniel Harris Meyer sold 30,000 shares at an average price of $121.79, amounting to $3.65 million. Such transactions can often signal insider sentiment regarding the company's future prospects and warrant close attention from investors.
The increasing presence of institutional investors in Shake Shack's stock highlights a broader trend in the market where large funds are taking significant positions in companies with growth potential. The substantial increase in holdings by firms like HSBC and Fisher Asset Management underscores a belief in Shake Shack's long-term viability and growth prospects. With 86.07% of the stock held by institutional investors, the company is positioned to benefit from the stability and resources that these investors can provide. The interplay between insider trading and institutional investment will be crucial to watch as Shake Shack moves forward in a competitive landscape.