Restaurants that offer tacos see increased patronage as more people return to restaurants for their favourite foods. This space has some fundamentally strong stocks. Yum! Brands (NYSE.) and El Pollo Loco, (LOCO), are both worth investing in. Conversely, Chipotle Mexican Grill (NYSE:) and Fiesta (NASDAQ:) don’t look well-positioned to capitalize on the industry tailwinds. And we think these companies’ bleak financials make their stocks best avoided now. Keep reading. Tacos are a popular choice for any occasion. They can also be taken with you to the office or eaten at home. There are many options for customized tacos available at fast food restaurants and in-home dining establishments. Additionally, tacos are becoming a more popular option for appetizers due to their healthy and affordable features.

High demand is being felt by both brick-and-mortar and online food businesses for tacos. This space Yum! Brands, Inc., El Pollo Loco Holdings, Inc., and LOCO are both well placed to profit from this emerging trend.

However, with consumers’ preference shifting towards healthier and homemade food, we think fundamentally weak companies in this space—Chipotle Mexican Grill, Inc. (CMG) and Fiesta Restaurant Group, Inc. (FRGI)—might struggle to stay afloat.

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