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Actionable news in LOCO: EL POLLO LOCO HOLDINGS Inc,

Cramer: Is this stock the next Chipotle?

Shares came public at $16. By the second day of trade they leapt to $34. Is the price action a sign of irrational euphoria or warranted optimism?

The stock is El Pollo Loco and there are certainly skeptics in the market. They say the success of GoPro has ignited a kind of frenzy among investors, who are buying without good reasons.

Jim Cramer, however, isn't so sure. "The advance in LOCO may not be so loco at all," he said.

First, Cramer noted, the authenticity of the company's food could have great appeal. "I think it claims a special niche (among rivals)." Also money from the offering will be used to pay down debt.

However, of all the catalysts driving this stock, perhaps none is more powerful than the possibility that it could be the next Chipotle.

Bulls are quick to point out that "Each El Pollo Loco store makes $1.8 million in average unit volume. That's $300,000 more...


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