I love McDonald's (MCD) .
In fact, I ate dinner there with my wife on Sunday after 5 p.m. Mass. Have you tried that new Quarter Pounder? If you have not, since the firm went to fresh beef, then you have never tried the darned thing. It's awesome. Give it a shot. I'm hooked.
Fundamentally speaking, the name trades at 19.1 times forward-looking earnings, the S&P 500
I will tell you flat out what I do not like. Second-quarter revenue showed an 11.6% year-on-year decline. In fact, while earnings continue to grow, the three-year sales rate is still a negative number. Heck, book value per share is a negative number. Are there positives? Of course.
Margins remain healthy, and they pay you 2.6% just to own the darned shares. On top of that, these shares are down nearly 9% year to date. Now, we are going to have to look at a chart (or two).
My Technical Analysis
Well, it's plain to see that the guys writing the algorithms can also read Fibonacci levels.
Oddly, Money Flow has been solid, while the stock has not only been stuck in low gear, it's been in reverse this summer. You can see the name hanging onto a 61.8% retracement of the early March through early June move by a thread. In fact, the spot has been pierced without actually breaking several times now.
- Receive the 'Market Recon' Column Each Day
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Guess what? I don't care about them. Good chance that few of them have skin in the game, or even ever will. Warren Buffett is known as a value investor. Buffet is obviously well aware of the McDonald's product. Buffett has not taken a bite of McDonald's. At these prices, that makes sense.
However, Buffett is huge. I am not. When Buffet moves through the jungle, he leaves a trail of flattened vegetation that many can and will follow. People like us can still move swiftly and silently. They don't see us coming or going.
Recent support has been a sloppy $155, I don't trust it. The 2018 low is around $147. I don't know about you guys, but I am going to engineer a net basis in that neighborhood -- or at least get paid to try. So, let's rock... and then let's go eat some of those delicious new Quarter Pounders. Even better without the cheese, dudes.
Not at this last sale, sport.
Write a Cascading Series of Puts (minimal lots)
Those expiring close to the third quarter October 25 earnings release? Now, you're talking.
- Sell (write) one $150 October 150 put (last: $1.75);
- Sell (write) one $145 October 145 put (last $1.06);
- Sell (write) one $140 October 140 put (last $0.51);
- Aggregate Credit: $3.32.
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