Wednesday, August 30th, 2006
Betting against Ronald McDonald?
I went to McDonald’s on Monday night (don’t ask why) and developed an overwhelming desire to short its shares. Maybe I’m just nostalgic for my childhood, but whenever I go to McDonald’s these days I can’t help but get depressed about the state it’s in.
The restaurants have a rundown look and the staff are no longer enthusiastic young kids in their first job. The clientele were mostly young gangsta wannabes and it certainly didn’t feel like a place I’d want to take a family. And I swear the Big Macs have shrunk. The only saving grace was the French fries, which were actually quite good.
When I got home and checked out the stock, to my surprise it was in a very strong uptrend above its 200-day moving average and therefore very unshortable! (see chart below). I know McDonald’s were in trouble a few years ago, but it seems their introduction of healthier menus is paying off.
Whatever it is, the market is liking it and it is actually an interesting large-cap growth candidate. Analysts even seem unfazed about the departure of a key executive recently, perhaps because sales growth is healthy. Motley Fool is also positive on the shares. I must just be getting old.
Word Count: 204. This entry was posted on Wednesday, August 30th, 2006 at 8:14 pm and is filed under Stock picks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
