Stockchase Insights McDonalds MCD-N BUY ON WEAKNESS Oct 25, 2024

Consumer staples have been performing under the radar and will continue.

He added at $250 a month ago. With inflation the lower income population shifted more to eating at home and away from fast food restaurants. McDonalds is now moving to more value priced deals and encouraging people to shift to digital offerings, apps, to increase the use of a loyalty program. McDonalds has a unique business model in that it owns the land that the franchises sit on. 40% of its revenue comes from rent from the franchises.       Buy 28  Hold 13  Sell 0

Their decision to extend their $5 meal beyond the summer was applauded by consumers and Wall Street alike as consumers are pushing back against higher prices. Smart.

It recovered a few dollars today after falling on the illnesses caused by the Quarter Pounder. We don't want that gain. Rather, we want upside on a good quarter--they report tomorrow. 

It was over bought to begin with before the recent difficulties. It is in a trading range so if it hit $260 or $270 he would buy it.

He trimmed it last year due to continued cost pressures and valuation. Is worried about sales growth stagnating and more competition.

They report Thursday. Restaurants have struggled because of high prices, but MCD rolled out some cheaper offerings and customers responded, he hopes.

Well managed. Super-competitive environment. Noted consumer weakness in US and globally. Great job adapting to changing environment over the last 30 years. Growth only about 5-7%. More expensive US mortgages have reduced disposable income.

He always says buy on dips. A machine, well-run by fine managers.