by winston » Sat Jul 09, 2016 9:55 am
not vested
At-Risk American “BFG” Stocks: McDonald’s Corporation (MCD)
Just recently, iconic American BFG McDonald’s Corporation (NYSE:MCD) won an important legal battle in Europe.
Future Enterprises, a food and beverages producer from Singapore, attempted to register “MACCOFFEE” in the EU, but was rebuffed by several European courts. Unfortunately for MCD investors, that may be the only victory in Europe that the Golden Arches will have for quite some time.
MCD stock has been anemic this year, and the Brexit is just begging for further trouble.
Unlike most cases, for MCD, the Brexit is a compounding problem as opposed to a brand new one. Over the last three years, total revenue has slipped an average of nearly 5%. That compares unfavorably to a near-6% sales growth rate between 2010 through 2013.
The core issue is market saturation, a common Achilles heel for a BFG company. After having conquered the known world, where else can MCD impose its will?
Worse yet, McDonald’s has shown vulnerability to previous European fiascos. During the height of the debt crisis and austerity concerns, MCD saw a sharp reversal of fortune in its most lucrative market. Even the Russia-Ukraine conflict brought about temporary store closures.
As with AAPL, the risk to MCD stock isn’t one of total collapse. However, with the Brexit already negatively impacting major European indices, it’s a fairly safe bet that the company will experience volatility for the remainder of the year.
MCD stock won’t be on the dollar menu any time soon, but patient investors may get to see a nice discount further down the line.
Source: Investor Place
It's all about "how much you made when you were right" & "how little you lost when you were wrong"