Why We Put “The Next Chipotle” in the Danger Zone

el pollo loco
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CEO David Trainer sat down for an interview with Chuck Jaffe of MoneyLife and MarketWatch.com to discuss our Danger Zone call for the week of March 23.

El Pollo Loco is a restaurant chain based in California that serves Mexican-style grilled chicken with an emphasis on a “healthy” image. Loco went public in July 2014 for $15/share and investor optimism took the shares to over $41/share in August. Since then, Loco has dropped to below $20/share, but a strong fourth quarter to 2014 took the shares up to $26. We believe that shares still have much further to fall, and that investors who think this restaurant is going to become the next Chipotle (CMG) are willfully ignoring the company’s history and its current growth track.

Photo credit: James (Flickr)

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