Investment Ideas: January 9th, 2018

McDonald's (MCD)

McDonald's was founded in 1940 by Richard and Maurice McDonald in San Bernardino, California.  Over the years, the company has grown to operate 37,000 restaurants in 100 countries.  About 70 million customers are served daily by McDonald's.  Yeah, you read that correctly, 70 MILLION CUSTOMERS A DAY!  They are by far the largest restaurant chain in terms of revenue.  McDonald's is also the world's second-largest employer with 1.5 million employees.  Wal-Mart is number one with 1.9 million employees.

If you want to learn more about the origin story of McDonald's check out the movie "The Founder."  It's a really interesting movie that features some great actors.  Definitely one of my favorite movies I saw last year.

Anyways, McDonald's stock is currently looking like a great investment opportunity.  In 2017 the stock went on a tear rising over 40%.  As you can see in the chart above, the price was on a nice uptrend for most of last year.  I think that it's more likely than not that this trend continues.


The stock is currently above the 50-day and 200-day moving averages which confirms the short and long-term uptrend.  RSI is moving sideways but is in the bullish zone.  MACD is rising and is in the process of crossing above the signal line.  This is a bullish sign.

There are a number of catalysts that could help propel MCD higher in 2018.  The first being the reorganization of McDonald's value menu.  It's being rebranded as the "$1 $2 $3 Dollar Menu" and will provide better deals for consumers.

The company is also expanded its food delivery service to more than 10,000 of its restaurants.  These changes, along with the continued improvement in food quality, should increase McDonald's earnings.

You may not be a big fan of McDonald's food (I'm not) but that doesn't mean you should avoid investing in this company.  You never want your own personal biases or preferences to interfere with your investment decisions.  Hundreds of millions of people do like McDonald's and the company has a great business model.  If you've been looking to add a consumer discretionary or restaurant stock to your portfolio, McDonald's is a solid choice.

MCD currently pays a 2.3% dividend yield.

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