MCD

[Roadmap2Retire]

This is an interesting development: "McDonald's (MCD) Will Discontinue Reporting Monthly Same-Store Sales Data"

http://www.streetinsider.com/Corporate+N...99067.html

[hendi_alex]

The slide continues. More and more competitors offer superior products. Any of those smaller competitors would be happy to steal 1% or 2% from MCD. It will not take a major competitor for MCDs to continue to erode. If 50 short order alternatives come on line and each one steals just a fraction from McDonald, then the damage will be enormous. Those 50 competitors may already be in place! This is definitely an example of past performance may not reflect future performance kind of situation. Personally, I think that McDonalds has been losing it relevance to customers in American markets for ten years or longer. The numbers are just finally catching up with that trend.

[Kerim]

(06-08-2015, 08:53 AM)hendi_alex Wrote: The slide continues.

And yet the share price has been truly robust. Given the doom and gloom surrounding MCD, I'd expect the share price to be in the low $80s by now.

I still think they're going to be just fine...

[hendi_alex]

MCD isn't going anywhere soon, probably never. It will just be along slow slide to less relevance. It will kick out a lot of cash during that time, but probably will not be a great total return investment. There is always a chance at a turn around, but I don't think that is in their culture. They want to make cookie cutter, tasteless products with little consideration given to nutritional content or to current trends in customer preferences. I can see why some would buy the stock, but is not for me.

[doomsardine]

Last month it's global monthly has declined almost by 0.3%.

[Kerim]

And yet here we are back over $100 per share!

[hendi_alex]

As posted on another thread. I'm not keen on the long term prospects for either MCD or KO, but will still add both to my big cap dividend portfolio. They continue to be winners until proven otherwise. Heck, MCDs has enough money to buy any startup competitor that has a great idea and great product. Lots of things that they can do to protect their turf. Like you have said, none of us know the ultimate direction that a company or the market goes. Vague pessimism about a business model or product line of a long term successful company is not a compelling reason to avoid the shares.

[Kerim]

(04-12-2015, 04:55 PM)Kerim Wrote: But no matter how much I read, I just can't bring myself to worry about MCD. Every time I look there are plenty of customers there, and eventually, they'll hit on a tweak to the formula that gets them back on track again (even if that means some variant on "back to the basics"). They've got top-notch real estate all over the planet, and the earnings lull and stock action just don't bear out the "McDonald's is doomed" story. Sometime in the next two to six years, the tide will turn and all we'll see are headlines praising MCD's execution, the share price will advance into the $120s, where it will "languish" for several years, at which point the doom-sayers can start all over again.

I could easily be wrong, of course, but this is my best guess!

Hate to say "I told you so"!


Nice report from MCD.

[Dividendsrule]

I've been defending MCD for years now...Huge position, happy happy long.

[Dividend Watcher]

OK, you guys can thank me later. Since I've moved to this new job, I no longer can just hop in the car and grab a double special for lunch every day. I swear I kept them afloat while they worked it all out.

Nice report but I don't think they're out of the woods yet. Yet I still see lines at the drive-thru's around here, they're paying $10/hr for starters and still have signs in the window offering the bonus if you work for them for more than 3 months. Amazing.

[NilesMike]

Just keeps making new all time highs.

[Forticus]

Just have seen the "hands raises" on picking MCD one year ago in the SA comments of Chuck Carnevales recent article "the only Aristocrats ...".
Didn't want to chime in over there.

After following MCD for years I joind the Owner's Club on June 3rd, 2015 at $96.50 and 3.5% dividend yield. My jump was based on ... well I just could sit still any longer and there were those speculations of a breakout. Only today, as part of my homework after my SA article, I did s future valuation. Based on my cost and data of 2015 I calculate a total return over 10 years of ca. 8% after tax. That includes dividends and assuming a sale of the shares in 2025. The
At 8% after tax ...
wait, dividends were not reinvested in this mode of Buffettology, Chapter 37, I think. It's price appreciation is backed by a DCF rate of 6,67% and FCF growth of 5%.
... I probably do not need those managed CEF vehicles any longer, nor rental property.