NEW YORK, Nov 21 — Increasing American diner choices for health-conscious options are holding sway on Wall Street, with shares of Habit Restaurants Inc more than doubling in their trading debut, underscoring the growing appetite among investors for stocks of fast casual restaurant chains.

Restaurants such as El Pollo Loco Holdings Inc and Zoe’s Kitchen Inc, which also made their public debut this year, have caught diners’ imagination with fresh ingredients and options such as whole wheat and gluten-free foods.

That has sent growth-hungry investors scouting for the next Chipotle Mexican Grill Inc.

Including Habit, known for its charburgers, five restaurant operators have raised about US$486 million (RM1.6 billion) in US IPOs this year, compared with US$231 million raised by two restaurants last year.

All but one of this year’s debutantes are fast casuals.

“People are moving from fast food to specialty restaurants,” said Joseph Schuster, founder of IPO research firm IPOX Schuster LLC.

“It’s a long-term structural trend and some of these specialty IPOs fit that niche very well and there is strong underpinning demand for these deals.”

Shares of Zoe’s Kitchen, which shot up 74 per cent in their debut in April, have more than doubled since then, and El Pollo Loco’s are near that mark.

Zoe’s shares are trading at 351.34 times forward earnings, and El Pollo at 48.92 times forward earnings, compared with 15.94 times for McDonalds’s Corp and 38.73 times for the overall restaurant sector, according to StarMine.

J. Alexander’s Holdings Inc has filed for an IPO, and Shake Shack is reported to have picked banks for an offering.

The investor demand comes handy for fast casual restaurants looking to expand.

Habit, with a presence in only four US states, and Zoe’s plan to double the number of restaurants over the next four years.

Sales of US fast casual restaurants are expected to exceed US$50 billion by 2018, from about US$34.5 billion in 2013, according to research firm Technomic.

Not all fast casual operators have been able to sustain the euphoria surrounding their public debuts, because of issues specific to their business.

Potbelly Corp’s stock has lost 10 per cent of its value since listing in 2013. Papa Murphy’s Holdings Inc has lost 17 per cent of its value since its debut in May. — Reuters