McDonalds (MCD)

Great brand. Struggled a little bit on their same-store sales but their track record of investing capital is impressive. Have lots of things working for them. What doesn’t inspire her is the valuation on the shares. Because it is a sort of “steady Eddie” business, there has been a shift in investor confidence with people getting more comfortable with the market so they are being put into stocks that are considered safe, such as this one. She doesn’t see a lot of compelling upside.

Just had an earnings miss. From a practical point of view, this has been a wonderful franchise, especially in the English section part of the world. Thinks they struggle to get the growth internationally. Longer-term, he feels this is a challenged franchise but it will continue to grow and continue to do well. Not in the right sweet spot to be a big grower and is challenged to grow in Asia. Yum Brands (YUM-N) would be a better alternative.

(A Top Pick Aug 20/12. Up 13.98%.) Bought this on a dip. This was followed by another dip in the fall and now we have another one. All of those were on slight earning misses. It is still innovative and is about 40% to Europe, which means Europe is now a positive. Still likes.

Looking at the chart, something concerns him. Since about April it has been forming a technical formation of lower highs and lower lows. They have done very well obviously going through a transformation in terms of restaurants, etc. You are paying up a little bit at 18X earnings. However, it gives you a lower beta with a higher dividend.

(Market Call Minute.) Great company but has always been a little too expensive for him.

This has been on his watch list. They are exposed all around the world. Have good opportunities for growth in the emerging markets. Have done a pretty good job of restructuring their business and trying to grow same-store sales. He prefers companies with a little bit faster growth.

Would be interested in picking it up in the $90 range. This is a difficult company to grow. They need to trim the menu down. You could own this over a several year period.

(Market Call Minute) Decent yield but difficult environment.

Has been a beneficiary of the slow growth economy of the world. People have been trading down to McDonalds. They have a very large European presence which is hurting them.

(Market Call Minute) Too expensive. Same store sales struggling and they are relying on the US.

Has a lot of admiration for this company. Summer tends to be a bit weaker and the stock has had a good run in the last 6 months so there could potentially be a bit of a pull back.

Great long-term Hold. Its dividend is secure and they will be able to grow this over time. Based on the recent results and the outlook that they gave, he has trimmed his holdings a little bit. Thinks it should be trading in the 15-17 times earnings. 3% dividend yield.

Very well managed. Have reinvented themselves a couple of times in their history and have done a great job of it. Had some headwinds in terms of same-store sales growth but they have motored on and have done well from a stock price standpoint. A little rich at 18-19 times earnings but still a very good franchise.

Have gone through a big transition of all their stores and are starting to come back a little bit. Feels there is some momentum in this. Surprised on the upside in their last earnings release.

Very great job. People want to own them. Impressive growth over the years. Tempered down over the last little while. The story is positive. You probably won’t get hurt but she thinks the multiple has limited expansion potential. There are better opportunities out there. Others in the space are trading at 10 times earnings.