Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

Posts Tagged ‘technical trend’

McDonald’s: Extending its Huge Success by Building a Global Cult Following

By for Profit Confidential

McDonald’s: Stock Market SuccessRecently, I had an opportunity to watch the 2004 documentary “Super Size Me” made by American filmmaker Morgan Spurlock. If you’re not familiar with it, it’s about the influence of food chains, namely McDonald’s Corporation (NYSE/MCD), on the massive obesity rates in America and the superlative rise in the obesity rate globally with the expansion of fast food restaurants. The movie reminded me not only about how unhealthy fast foods generally are, but also about the strategic thinking used by McDonald’s in driving the demand for the “golden arch.” Note that I’m just using McDonald’s as the example as it was the focus of the film.

You always know you are near a McDonald’s, as it’s easily recognizable by the iconic big yellow golden arches that can be spotted a mile away. There are over 33,000 restaurants in 119 countries, including the U.S., Canada, Europe, China, the Asia-Pacific, the Middle East, and Africa. The film indicated there were around 80 McDonald’s outlets located just in Manhattan. And that was in 2004 when the film was released. If you to want know the top U.S. fast food restaurants in China, read The Three Top Restaurant Stocks in China.

I’m not here to judge the film and its attack on the fast food industry; the film does tell us how well the McDonald’s brand has done worldwide, which is backed up by my stock analysis.

McDonald’s has been a top performer in the restaurant sector over the past decade after the company made a dramatic shift in its menu offering to include healthy meals and broaden its target market. While there … Read More

McDonald’s & this Other Stock
Feasting on Fast Food Profits

By for Profit Confidential

Stock  on Fast Food ProfitsWherever you go, you always know you are close to a McDonald’s Corporation (NYSE/MCD), defined by the big yellow golden arches that you can generally spot a mile away. With over 33,000 restaurants in 119 countries, you know you will always be near the seller of the “Big Mac” whether in the U.S., Canada, Europe, China, Asia-Pacific, the Middle East, or Africa.

The stock has been a top performer in the restaurant sector over the past decade after the company made a dramatic shift in its menu offering to include healthy meals and broaden its target market. My stock analysis shows that the strategy has worked, vaulting McDonald’s to the top of the fast food chain and leaving Burger King and The Wendy’s Company (NASDAQ/WEN) behind.

You could have picked up shares of McDonald’s below $8.00 in 1990 or at the $14.00 level in 2003 before the current nine-year bullish technical trend in the stock.

At the current level, my stock analysis is that much of the top growth has been discounted into the price of the shares, but you can still play the growth of McDonald’s, specifically in the Latin America region via Arcos Dorados Holdings Inc. (NYSE/ARCO)—the largest McDonald’s franchisee in the world based on system-wide sales and number of restaurants.

Arcos Dorados operates or franchises 1,840 McDonald’s-branded restaurants in 20 Latin American and Caribbean countries and territories. Countries include Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guyana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, St. Croix, St. Thomas, Trinidad and Tobago, Uruguay, and Venezuela.

Trading at $18.45 at the close of April 19, the … Read More

Tech Stock Wars: I Would Buy an iPad Over a Playbook

By for Profit Confidential

Jim Balsillie and Mike Lazaridis, the co-CEOs of embattled Research In Motion Limited (RIM; NASDAQ/RIMM) probably had massive headaches last week after watching their stock plummet over 10% on Friday to levels not witnessed since the first week of January 2004.

While a large part of the blame is solely on market leader Apple Inc. (NASDAQ/AAPL), RIM’s poor operational execution and mismanagement is a major factor for the current malaise for the maker of the “BlackBerry” smartphone.

The numbers tell the story. In the third quarter, revenues fell six percent year-over-year to $5.2 billion, albeit they gained 24% sequentially versus the second quarter. The company shipped about 14.1 million BlackBerry smartphones and a mere 150,000 “BlackBerry PlayBook” tablets, which have proved to be a massive disappointment. Comparatively, Apple sold a whopping 11.12 million “iPads” in its fiscal fourth quarter. And, worst of all, RIM estimates that shipments of its core BlackBerry smartphone will decline to between 11 million and 12 million units for the fourth quarter. These are poor metrics for RIM.

Just when you thought that things could not get worse, RIM announced last week that it would have to delay the launch of its new line of “BlackBerry 10” smartphones until late 2012. I’m not talking of a minor incident here, but a major gaff for a company trying to convince consumers and investors that it has a bright future and that they should trust the company. Failing to deliver a new product by a few days or weeks is acceptable, but it’s not when it’s months.

The reality is that BlackBerry no longer has that glamour it … Read More

Record Results & Good Visibility for Railroad Companies, But Nobody’s
Buying the Success

By for Profit Confidential

The railroad companies have confirmed that the industrial economy is on track for a solid second half. They are buying more equipment to deal with increasing load factors and most are planning to hire new workers to keep up with rising demand for their transportation services. This is a very good indicator for the future.

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