McDonald’s is in big trouble—and it could get even worse

imagesGood Bye Shit Food !!

Yahoo News – by Alex Rosenberg

Investors who have gorged on shares of McDonald’s aren’t feeling so good. And according to both technical and fundamental indicators, it could get even worse for the fast-food giant.

McDonald’s saw its stock plunge this week, touching a 52-week low after McDonald’s reported a 3.7 percent decline in global same-store sales in August. The worst drop in a decade, the number reflected a massive drop in Asia/Pacific sales on the back of a serious meat safety scandal in China. 

But the weakness wasn’t contained to Asia. In the U.S., McDonald’s same-store sales dropped 2.8 percent.

Currently the only component of the Dow Jones Industrial Average that’s negative for the past year, McDonald’s has dropped 10 percent over the past four months. But Steven Pytlar of Prime Executions says that it hasn’t bottomed out quite yet.

Investors who have gorged on shares of McDonald’s aren’t feeling so good. And according to both technical and fundamental …

“The buyers are leaving this market, and sellers are taking control. People are looking for a way out,” he said. “It looks like it could continue to head lower.”

He said that the stock has broken its level of support, which indicates that no bottom is in sight.

“There was support at about $94 as it was consolidating there this year, and now it’s just slipped right through that,” he said.

From the fundamental side, Erin Gibbs S&P Capital IQ says the stock is not quite a good deal.

McDonald’s “currently offers about a 3 percent dividend yield, so for an income-producing strategy, it’s starting to look more attractive,” she said. “But we’d like to see it get closer to about 16 times earnings for it to be a real value.”

Currently, McDonald’s trades at a price-to-earnings ratio of nearly 17—so Gibbs sees more downside for the stock as well.

http://finance.yahoo.com/blogs/talking-numbers/mcdonald-s-is-in-big-trouble%E2%80%94and-it-could-get-even-worse-021104348.html

Jim

3 thoughts on “McDonald’s is in big trouble—and it could get even worse

  1. People are finally figuring out that their cr@p is more toxic than the rest of the fast food joints.

    Not that they aren’t almost as bad, mind you.

  2. This either indicates that people are earning more and they don’t have to eat off the dollar menu anymore.

    Or.

    They are getting so poor they can’t afford to eat off the dollar menu anymore.

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