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Trading fast food: 7 plays on big names

Struggling fast food giant McDonald's may have started its comeback, even if reported menu changes fail to drive a turnaround, CNBC "Fast Money" traders said Tuesday.

The company will reportedly expand all-day breakfast and simplify drive-thru menus, among other modifications, as it looks to boost performance in the United States. Shares of McDonald's—which have climbed 4 percent this year—may be worth buying because the company has so much room to improve, trader Brian Kelly contended.

Read MoreMcD's to expand all-day breakfast, add new sandwiches

"The reason why you buy McDonald's is it's so bad it's good," Kelly said, adding that menu changes make a "silly" reason to own the stock.

McDonald's Enter sign
Scott Mlyn | CNBC

The chain's potential largely comes from "an incredible amount of land value," said trader Tim Seymour, whose firm Triogem Asset Management owns the stock. McDonald's has about 36,000 restaurants globally.

He added that the company's capital allocation, which includes an 85 cent per share quarterly dividend, makes it worth buying. Trader Pete Najarian agreed that McDonald's looked appealing where it closed Tuesday, just below $98 per share.

Trader Steve Grasso said he would buy McDonald's and sell fast-food competitor Yum Brands. Shares of Yum—which owns Taco Bell and Pizza Hut— have jumped 24 percent this year.

Shake Shack

Burger chain Shake Shack is slated to report first-quarter results on Wednesday. Shares have floated more than 30 percent higher in the last month.

"I would not be near" Shake Shack, Seymour said. He noted that the stock looks overpriced at more than $65 per share.

Read MoreShake Shack forming eerie IPO pattern: Chart

Kelly called Shake Shack a "great franchise," but said the stock will trade lower.

Disclosures:

Tim Seymour

Tim Seymour is long T, BAC, C, DIS, F, GE, GM, GOOGL, INTC, JCP, KO, SUNE, TBT and VIP. Tim's firm is long BABA, BIDU, CHL, MCD, NKE, NOK, SBUX and YHOO.

Pete Najarian

Pete Najarian is long AMAT, AAPL, BABA, BAC, BMY, BP, CSX, DISCA, FOXA, GE, KKR, KO, LLY, MBLY, MRK, PEP and PFE. He is long calls AA, AAL, BBY, BK, CBS, COP, CSX, DB, EJ, F, FL, GE, GS, HSBC, HZNP, IMAX, KO, KSS, LEN, MAC, MYL, NEE, NTAP, NUAN, OC, PFE, SYY, TEVA, TSX, UAL, UUP, VALE, VMW, VZ, XLF, XOM and ZIOP.

Steve Grasso

Steve Grasso is long AAPL, BAC, BTU, DD, EVGN, MJNA, PFE, T, TWTR and GDX. His firm is long TWTR, APA, AMZN, MCD, OXY, RIG, NE, TSE, VALE and IBM. His kids own EFG, EFA, EWJ, IJR and SPY.

Brian Kelly

Brian Kelly is long BTC=, BBRY, SPY puts and U.S. dollar. He is short Australian dollar, yen and yuan.