I was on CNBC today talking about McDonalds (MCD). Here is my take on the golden arches. (October 06, 2015)

by DAN
I want to look at McDonald’s ( NYSE:MCD ) today and here’s why: I got a call from CNBC towards the end of the day. They wanted to know what I thought about McDonald’s ( NYSE:MCD ). Basically they were looking for somebody the explain the bullish case, because there’s always a bullish and bearish scenario, always. So I said, “Sure, I’m looking at the stock and I could totally make that case.” I want to just explain to you how I went about doing that.

By the way, here’s where the stock’s trading now, after hours, that’s because Yum! Brands ( NYSE:YUM ), the numbers they reported weren’t exactly yummy, so this stock’s going to trade lower on that. So this was my take, this is what I decided to do. My deal is, as a private money manager, meaning I manage my money and I manage other traders at “Stock Market Mentor”. This is not really a stock that really interests me so much, but it interests a lot of people, so this is how I look at it.

First of all a 3.3 percent dividend, that’s pretty good for a Dow stock. Now, we look at the weekly chart, this still looks like a mess, but lets zoom out. Now I’m looking at that and I’m thinking, “Hmm, interesting”, because this stock peaked back in early January or maybe even in December 2011, but it basically peaked the first part of 2012, and it’s been trending sideways ever since. One, two, three, almost four years this has been trending sideways. Meanwhile, of course, the S&P, up until this year, kind of continued moving up. McDonald’s ( NYSE:MCD ) has not been participating in this move. It’s been trending sideways here, like everything else has, but it hasn’t been participating.

Meanwhile, the earnings per share, last year relative to the year before, they were down. There was no growth in earnings per share, in fact there was even some contraction. And so despite that the stock was trading sideways. Now, the projections for 2016 are that they make over $5.00 a share, which is the first time that will have happened in several years. So McDonald’s ( NYSE:MCD ), at least analysts are seeing it, as kind of getting on track. It’s not like suddenly they’re going to be THE place to go. But hey, it’s McDonald’s ( NYSE:MCD ), it’s a Dow stock and a lot of people still eat there. How many billions are served? What’s really important to me is, the stock, after all this time, this is not a top, it’s a high base.

And so then you combine that, add to that the fact that they are now extending breakfast, most of the breakfast menu, not all of it, (but hey, the hash brown’s work for me) they’re serving that 24-hours a day. Now, this is especially good around the college campuses, the fraternities, and sororities, and dorm rooms and all that where everybody’s getting drunk on the weekends. They don’t get up until after 10:30 in the morning, so it’s nice to be able to cruise down to McDonald’s and grab breakfast, even if it’s noon (sorry, just keeping it real). So I think that’s going to be a big deal for them. It’s not going to hurt their cause at all. I’m not really “pounding the table” on McDonald’s ( NYSE:MCD ); I would say though, if it falls into the mid 90’s, I think it’s a GREAT to buy this stock and just hang on to it.

Anyway, those were the types of issues that I was raising on CNBC, I don’t know if I mentioned these stocks, I think I did. Like Nike ( NYSE:NKE ) is similarly positioned, where it’s close to an all-time high, but they pay no dividend. Visa ( NYSE:V ), here was the all-time high, they pay virtually no dividend at all. You can also, actually, look at Microsoft ( NASDAQ:MSFT ), which we have to zoom out here, this is actually close to at least a 52-week high, pays a little bit better dividend. I’m just looking at McDonald’s ( NYSE:MCD ) because I like this very, very, very prolonged high base. Now we just need to see this stock break above 103.00, 104.00 and this is “off to the races.”

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