This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Don't Overreact to McDonald's Results

Now I'm making this comparison knowing full well that Yum! has had some extraordinary circumstances in China, including scandals regarding two suppliers to its KFC restaurants and fears over the health of its chickens. So it's not exactly an apples-to-apples comparison with McDonald's.

That said, it's worth noting that in the July quarter, both companies posted 1% growth in same-store sales, the metric tracking performances of restaurants opened for at least one year. Not only that, both companies have trended comparably in their strengths and weaknesses, including posting similar 1% growth in the U.S. All this while both companies suffered weak revenue results internationally.

It's foolish to put too much emphasis on one quarter with McDonald's, especially given the company's size and scale. Besides, as one of the largest franchisers in the world, revenue growth alone is not always an accurate gauge of the company's true performance.
[Read: <a target="blank" data-add-tracking="true" href="http://www.mainstreet.com/article/money/investing/debt-ceiling-crisis-averted-inside-look"><em>Debt Ceiling Crisis Averted: An Inside Look</em></a>]

Plus, with the company's continued focus on service, value and innovation, I believe McDonald's will emerge out of this rut to drive solid long-term profits. What I'm not expecting however, is a quick recovery or the notion that management will say something on Monday that will "make or break" the company.

I believe the stock will regain its $100 mark some time in 2014. At that point gourmet results will begin to pour in. Not before.

At the time of publication, the author held no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a co-founder of StockSaints.com where he serves as CEO and editor-in-chief. After 20 years in the IT industry, including 5 years as a high school computer teacher, Saintvilus decided his second act would be as a stock analyst - bringing logic from an investor's point of view. His goal is to remove the complicated aspect of investing and present it to readers in a way that makes sense.

His background in engineering has provided him with strong analytical skills. That, along with 15 years of trading and investing, has given him the tools needed to assess equities and appraise value. Richard is a Warren Buffett disciple who bases investment decisions on the quality of a company's management, growth aspects, return on equity, and price-to-earnings ratio.

His work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
MCD $95.65 -0.54%
KO $39.42 -0.18%
WMT $72.53 0.93%
YUM $90.67 -0.96%
AAPL $126.00 -0.35%

Markets

DOW 17,683.58 -46.53 -0.26%
S&P 500 2,068.76 -8.02 -0.39%
NASDAQ 4,991.94 -17.2740 -0.34%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs