Shake Shack A 'Name You Have To Watch'

Jill Malandrino was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

TheStreet's Jill Malandrino said Shake Shack Inc SHAK is a "name you have to watch" heading into Wednesday afternoon's earnings report. Though the company does not yet have options that trade, it was "one of the hottest" IPOs this year – debuting in February.

Malandrino said the overarching concern with the name, as with the restaurant industry generally, is of the high costs associated to maintain its business model. With competitive margins "relatively low," these names frequently take time to show investors whether their marketing strategies and menus can translate to new markets.

Specific to Shake Shack, Malandrino said the name has recently sold off without any news, suggesting to her that it could be due to profit-taking following a huge run-up. In fact, the stock is down more than 17 percent since hitting a high of $79.50 earlier this month. The stock's low, of $38.63, came shortly after its IPO in February.

Shake Shack reports earnings after the bell, with Estimize expecting $34.05 million in revenues and a loss of $0.01 per share.