McDonalds (MCD) – I’m Lovin’ It

One of my favorite stocks for years now has been McDonalds (MCD). Like their food or not, the company knows how to sell a hamburger. As for me, I consider myself to be a fast food connoisseur and I can tell you, after years of experience at consuming countless hamburgers at fast food joints ranging from the Piggly-Wiggly to some of the most well-known 5-star fast food establishments around, the Burger Kings (BK) and Wendy’s (WEN) of this world are trying everything in its power to stay releant with MCD, and all they do is throw themselves deeper into the abyss of irrelavency. In essence, you can’t compete with McDonalds burger-for-burger – you just won’t win. Instead you take the playbook of what Target (TAR) did to increase its sales, by specifically moving itself away from competing directly with Wal-Mart (WMT) and their pricing power.

Likewise, companies like Chic-fil-a, Moe’s, Chipolte (CMG) (and originally owned by MCD before selling it off) have found a way to carve out their niche in the fast food market by differentiating themselves from MCD as a completely different food joint and offering. So companies like WEN and BK better figure out a way to compete with MCD and they aren’t going to find that by re-inventing the hamburger, instead they need to change their whole approach to doing business and what they offer their clientele. 

Now that’s the In-and-Out (another popular and solid fast food joint) of McDonad’s competition… now let’s look at the stock. 

Here’s the Nitty-Gritty:

• +3% Dividend. 
• Unparallelled success year-over-year providing investors with great returns
• Management that continues to adapt to the social environment of the day, and has come out unscathed from potential pitfalls (i.e. Supersize me documentary)
• Stock itself has pulled back on the Fibonnaci to the 50% retracement level making it a desirable entry point. 
• At key long-term support where there will likely be a number of buyers going long at. 

Here’s How I trade MCD: 

• Long at $88 or less
• Place stop-loss at $83.50
• Target if you are swing trading it would be at $95.50, otherwise, long-term folks should hold at least until it crosses back above $100 again. 

Here’s the MCD Chart: