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.

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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 than Chipotle's average stores first made," Cramer noted.

And like Chipotle, the runway is significant. "It has 400 restaurants currently and management believes there is room for 2300 as it expands into the rest of the country, a reasonable trajectory if they execute correctly."

Also, same store sales have been running in the high single digits with Pollo Loco delivering a 12 percent comp number in the third quarter of 2012. "They did better than Chipotle for many of those quarters."

But there's something else behind the advance, and it's something Cramer says most individual investors wouldn't know.

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"Pollo Loco is what I call a sliver deal, an offering of only 6 million shares out of a total of 35 million." Because only a sliver of the shares have come to market, investors who may be hungry for growth offered by this chain are left scrambling. Quite simply demand exceeds the current stock supply. In turn, shares surge.

However, just because the IPO was either engineered to drive an advance, or not priced well, that doesn't mean the stock isn't promising.

"The simple fact is that this company is unique and it does have the characteristics of a company that could be the next Chipotle," Cramer said. And if Pollo Loco can grow into earnings of $1 a share, Cramer said, "I can easily see growth investors paying up."

And if you're among those skeptics who argue the Pollo Loco IPO is a sign of the top, Cramer has a few choice words. "I am sorry, but I don't think it is."

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