This week has started off on an excellent note for Shake Shack (NYSE:SHAK). The fast food chain has enjoyed an excellent year, rising more than 70% year-to-date (YTD). Today it’s rising even more, though, on news that a prominent activist investing firm has taken a new stake in the company. Engaged Capital now owns 6.6% of Shake Shack, but it isn’t stopping there. Its founder and CIO, Glenn Welling, has made it clear that he wants to control three board seats and has launched a proxy battle to secure them. While SHAK stock has performed well over the past year, questions abound regarding its growth potential. As The Wall Street Journal reports:
“Shake Shack had a market capitalization of roughly $2.8 billion as of Friday. Its shares have been cut nearly in half from an early-2021 high—even after rallying more than 50% this year—as inflation pressures have led some customers to pull back on spending and compressed margins. Shake Shack has also struggled to bring back lunchtime diners in bigger cities as fewer people commute to offices daily.”
SHAK stock has been rising all day on the news. As of this writing, it is up almost 10%, suggesting that Wall Street looks favorably upon this new deal. This makes sense when we consider that institutional investment has swayed away from Shake Shack over the previous quarter. While hedge fund sentiment is mixed, it’s clear that Wall Street has soured on SHAK stock recently despite its steady growth. Let’s take a look at the top institutional investors maintaining long positions in the fast food chain.
Top 5 Investors Betting Big on SHAK Stock
Institutional sentiment toward SHAK stock has been mixed since 2023 began. According to data from WhaleWisdom, the number of funds holding it has increased by slight margins. Percentage ownership has also seen a slight bump, rising by 4%. However, the number of closed positions has surged by much more, rising roughly 26%, while the number of reduced positions has increased by 11%. Both new and increased positions are trending downward as well. While the company’s put/call ratio is falling, it is still at 0.8%, suggesting that bearish sentiment towards SHAK stock is still relatively high.
With that in mind, here are Shake Shack’s top institutional investors:
- BlackRock (NYSE:BLK): 5,776,878 shares. The multinational investment firm recently reduced its position in SHAK stock by 404,540 shares.
- Vanguard Group: 4,114,443 shares. The mutual fund leader added 69,761 SHAK stock shares in Q1.
- Daniel Harris Meyer: 4,087,613 shares. Shake Shack’s founder is still among the top investors, although he recently trimmed his position by 439,115 shares.
- Fred Alger Management: 2,370,120 shares. The asset management firm recently deceased its Shake Shack position by 1,047,130 shares.
- Gilder, Gagnon, Howe & Co: 1,587,037 shares. This brokerage firm recently offloaded 28,823 shares of SHAK stock.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
