Free cashier …) New menu and new expectations in the annual report of the McDonalds!
Starting a week with fast food is not good for your stomach, but very good for your pocket.
Have a good day, and with you a lover of healthy and delicious food Andrew Green.
Today we are preparing for the annual accounts of McDonalds. I think that this market participant does not need any PR, but I recommend to study a bit of its history and look at the price chart for the last 15 years, as there is still something to see.
The company was founded in 1940 by the brothers Dick and Mac Macdonald (the first restaurant opened in San Bernardino, California), in 1948 for the first time in the world formulated the principles of the concept of “fast food”.
In 1954, Ray Croc acquired from the brothers McDonald’s the right to act as an exclusive agent for franchising. In 1955, he opened his first McDonald’s in the town of Des Plaines, Illinois (now – the museum of the corporation). In 1955 Croc registered the company as McDonald’s System, Inc. (in 1960, renamed the McDonald’s Corporation). In 1961, all rights to the company were fully redeemed by Croc.
Almost 100% of the company’s shares are in free circulation. Capitalization for the current time is $ 142.186 billion.
(WIKIPEDIA)
Analyzing the graph (Figure # 1), you immediately notice a few interesting points:
- total growth of shares from 2006 to 2018. – from 32 to 178 USD (almost 600%);
- in the period of the crisis in 2008, the decline in the value of shares from 60 to 45 USD, which in fact is one of the minimum declines in the share price of giant companies during the crisis;
- the period of uncertainty is from 2012 to 2015;
- uncontrollable growth from the second half of 2016 and to our time. From the level of 110 to 178 USD. (60% in less than a year and a half).
Let’s concentrate on the last dash. In addition to the general dynamics of the US stock market, huge support for the company was provided by the adoption of a strategic compromise among shareholders for the further development of the company, primarily in the territory of the United States itself.
A more important and topical question is whether to expect further growth. The answer is unequivocal – YES, it is necessary to buy. Trade recommendation: BUY.
The reasons for this decision are:
- Strong market position among competitors of fast food.
- A successful marketing solution “1 $, 2 $, 3 $ Menu”, ensured an increase in revenues by 1.4%.
- The positive outlook for earnings per share of $ 1.57 compared with $ 1.49 for the previous year. In addition, over the past 10 years of reporting, the company exceeded this forecast figure and only once the fact came out according to a previously published forecast.
- Overall target market expectations in the region of $ 198 per share.
In general, the recommendation itself is understandable, but when to enter and at what price to orient. Look at Figure # 3 (timeframe: 30 minutes). Here we clearly see the support line at $ 175.
Examples of transactions:
- conservative option:
BUY limit 175.10, SL 173.00, TP 195.00 - aggressive option:
BUY from the current (2nd volume), SL 173.00, TP1 195.00; TP2 (hold 220)
Our novice partners and trade participants I strongly recommend you to carefully study the issues of the correct selection of the volume of the deal in trade. One can get enrolled to one of our basic individual training courses, which you can learn more about on the Ester website, and also apply for personal consultation by writing to support@esterholdings.com support mail, with a note for Andrew Green.
My attitude to fast food is ambiguous, I understand that it is harmful, but when you really want, well, there once a month or once in six months, you can eat it. But you can make money on it every day.
Do not be afraid of BIG income, but stay in shape! Take care of yourself and your health, one can not buy it for any money.
Andrew Green