Investors Are Betting Big Against Shake Shack -- Why They're Wrong

Burger fans love Shake Shack (NYSE: SHAK), but a lot of investors don't feel the same way. The fast-growing restaurant chain is attracting plenty of naysayers these days. There were 10.7 million shares of Shake Shack sold short at the end of November, a number that may not seem like a lot but represents nearly half of the stock's public float.

The short interest ratio of 47% is high, and given the stock's modest average daily trading volume of roughly 622,000 shares, it would theoretically take 17 days for shorts to clear out of Shake Shack at that pace. There's a lot of money riding on the stock heading lower, but Shake Shack's fundamentals and recent momentum suggest that betting against the former market darling is not such a good idea.

Image source: Shake Shack.

Source: Fool.com