Stocks That Should Surprise the Market: Shake Shack Inc. (SHAK), Pacific Drilling S.A. (PACD)

Shake Shack Inc. (NYSE: SHAK) shares are 6.77% up in the year-to-date (YTD) period and have moved 5.65% or $3.4 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +111.93% lower. Comparatively, the stock is -18.96% down YTD and 14.49% over the trailing 3-month period. If we look at the shorter duration, its week performance is 15.03% and 15.97% over the month.

Analyst Recommendations

On April 21, 2020, BTIG Research recommended the SHAK stock is a Neutral, while earlier, Wedbush had Upgrade the stock as a Outperform on August 20, 2020. 19 analysts offering the recommendations for the stock have a consensus rating of 2.80 to suggest that the SHAK stock is a “Moderate Buy. 2 of the 19 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 3 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $63.60 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $53.46. The forecasts give the Shake Shack Inc. stock a price target range of $77.00 on the higher side while at least one analyst think the stock could plunge to a low of $45.00. The two limits represent an upside potential of 17.4% or -41.33%.

Earnings Forecast

Analysts estimate the earnings to decrease -21.60% in the current quarter to -$0.2, down from the $0.26 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$0.72, down -13.70% from $0.72 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.3 and $0.04. Wall Street estimates earnings per share to be at an average of $0.1 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 29 over the last 12 months, while SEC filings reveal that there have been 48 insider sales over the same period. Insiders have purchases 240,265 shares while those sold by company executives and officers stand at 1,432,020. The last 3 months have seen insiders trade a total of 13,259 and 79,689 in purchases and sales respectively.

Meyer Daniel Harris, a Director at the company, sold 23,334 shares worth $1.28 million at $55.03 per share on Aug 11. The Director had earlier sold another 1,666 SHAK shares valued at $91726.0 on Aug 14. The shares were sold at $55.06 per share. Meyer Daniel Harris (Director) sold 25,000 shares at $55.09 per share on Jul 29 for a total of $1.38 million while Meyer Daniel Harris, (Director) sold 25,000 shares on Jun 01 for $1.38 million with each share fetching $55.16.

Pacific Drilling S.A. (NYSE:PACD), on the other hand, is trading around $0.25 with a market cap of $16.85M and analyst research firms have a negative stance on its shares. Some analysts are even forecasting -$3.97 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Pacific Drilling S.A. (PACD) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

PACD’s operating expenses over the recent quarter were at $38.52 million. This represented a 1.0% of the company’s total revenues which amounted $38.91 million. With this in place, we can see that the company’s diluted EPS declined -$1.16 on the year-over-year period, shrinking to -$0.98 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $2.17 billion from $2.27 billion over the previous quarter. The cash flow from operating activities totaled -$73.23 million, significantly lower than the -$51.87 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$80.19 million.

Insider activity

Insiders have transacted a total of 26 times at Pacific Drilling S.A. over the last 6 months, with insider purchases undertaken 2 times and accounting for 186,355 shares. Insider sales totaled 57,406,926 shares over the same period, with these deals completed in 24 transactions. Looking at these numbers, we realize that net purchases over that period are -22.0 shares. Insiders now hold a total of 5M shares after the latest sales, with -88.70% net shares purchased.

Major holders

Insiders own 0.60% of the company shares, while shares held by institutions stand at 16.60% with a share float percentage of 70.81M. Investors are also buoyed by the number of investors in a company, with Pacific Drilling S.A. having a total of 79 institutions that hold shares in the company.