Investors seem to love new stocks. Wall Street routinely sends stocks soaring when companies initiate their initial public offerings (IPOs). The most recent example is the restaurant chain Cava Group (NYSE: CAVA).

Cava is described by some as a Mediterranean food version of Tex-Mex fast-casual restaurant chain Chipotle Mexican Grill. Investors hope this relatively new restaurant competitor can be as successful as Chipotle as a restaurant and as a stock. Chipotle stock appreciated in value enormously since it went public.

If you are considering this new stock opportunity, you might want to take a moment to think things through before rushing to add Cava Group to your portfolio. IPO stocks often experience buying frenzies at their public debuts, only to fall significantly in the months after.

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Source Fool.com