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TheStreet Open House

McDonald's Sales Heat Up as Consumers Eat Up

Editor's note: Jim Cramer told viewers of his "Mad Money" TV show on Tuesday that Intuitive Surgical (ISRG) and Potash (POT) are two ugly ducklings set to become beautiful swans. Here's another stock with those same characteristics.

NEW YORK ( TheStreet) -- It has been a bizarre run for McDonald's (MCD) over the past couple of years. Starting in 2011, the stock was trading in the low $80 range.

Then near the end of that summer, investors panicked, gold skyrocketed along with volatility and all hell broke loose. It was the herd mentality at its finest. But amid the chaos, the Golden Arches were not only holding up, but the stock was killing it, running all the way to $100 a share.

Traders and investors had apparently come to the collective agreement (read: herd mentality), that no matter what happened going forward, McDonald's would always be there -- and obviously, many other companies they irrationally left for dead would be too.

But that's not all. After a few months into 2012, the stock dropped all the way back to the low $80s because now all of a sudden, McDonald's global sales were down and the company could seemingly no longer compete. This story played out for the rest of 2012, marked by a 52-week low of $83.31 on Nov. 16.

Sheesh, talk about a change in mind! The stock was unofficially crowned the almighty savior in 2011 for its stability and dividend, before being kicked to the curb in 2012. So where is McDonald's going, and what will it do next?

There's no doubt that the management changes in 2012 took a toll on the stock price. McDonald's was having trouble adapting to both the harsh global economic landscape, as well as the increased pressure from Burger King (BKW), Wendy's (WEN) and Yum! Brands' (YUM) KFC and Taco Bell.

The explosive growth of healthy, quick eateries such as Panera Bread Company (PNRA) and Chipotle Mexican Grill (CMG) didn't help matters. Along with higher food costs, this contributed to McDonald's margins shrinking faster than management could respond.

But ultimately McDonald's would be the fast-food king that we all know and emerge with some form of alternative to combat these challenges.

McDonald's CEO Don Thompson rolled out a new menu in 2013 featuring some new items: the Egg White Delight, Premium Chicken McWraps and new flavored smoothies.

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