Many portfolio managers who own the stock have professed so much love for Shake Shack's burgers that they don't want to sell the stock. Never mind the fact that it only has a few locations, mostly in New York, and it could just be that portfolio managers narrowly thought about what they ate for lunch when they chose the stock.
"That's a rare development, one that matches the cult-like thinking we've seen in Tesla, where people like the car so much that they bought the stock. That's why I call Shake Shack the Tesla of burgers," Cramer said. (Tweet This)
However, one company that slipped under the radar was Red Robin. It reported a week and a half ago and totally surprised investors when it blew away the numbers. Many people on Wall Street were betting against Red Robin because they thought it would be a second-rate outfit. But maybe that's just because it doesn't have any locations in Manhattan, and money managers have not eaten at this shop recently.
"Shake Shack may have been expensive from the get-go, but it's probably the burger of choice for snobby portfolio managers," Cramer added.
Cramer suspects that portfolio managers may be more afraid of missing the next Chipotle than they are of avoiding a huge potential loss from Shake Shack. (Tweet This)
So, how the heck do you value a burger stock?
It can't be earnings, just based on the insane price-to-earnings multiples of Shake Shack and super expensive Habit Burger. So, how about store value?
Based on Cramer's research, one Red Robin is worth $2.2 million, a McDonald's is $2.5 million and a Jack in the Box is $1.1 million. In short, a typical burger chain location can range anywhere from $500,000 to $2.5 million.
Yet, Habit's average store is valued at $8 million and a single Shake Shack storefront is worth more than $40 million. Holy smokes!
And this craziness only scratching the surface in the burger world.
McDonald's, for instance, is trying to pull off a big turnaround. Cramer was impressed on Wednesday when the new CEO basically admitted that their burgers taste terrible, stating that they were recommitting to tastier food on the menu.
Cramer compared this to the big Domino's turnaround a few years ago when its executives also admitted that their pizza tasted like cardboard. They set about changing that, and the stock has been on fire ever since.
"Maybe McDonald's has to do the same thing, although I'd say its burgers are more like synthetic rubber tires than cardboard," Cramer added.
Basically, Cramer thinks if McDonald's wants to win back its franchises and clientele, it needs to simplify the menu. Gordon Ramsey doesn't need to go in there and get it a Michelin star. People just want tastier, juicer burgers.
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Finally, there is Jack in the Box, which Cramer considers to be the most underappreciated burger chain out there. It's the cheapest stock of the bunch, but no one seems to care. Yet it remains Cramer's favorite in the group.
"If you would have told me six months ago that the hamburger group would become the most emotional and even whimsical cohort in the market, I would have laughed you out of the room. Turns out the joke is on anyone who is trying to apply valuation metrics to this crazy industry," Cramer said.
So, if you are an investor looking for value, then Jack in the Box is the way to go. If you want a potential turnaround, then buy McDonald's. But if you just want a good hamburger—without the stock—then Shake Shack is the way to go.