Analytical Review of the Stocks of McDonald`s Corp
McDonald`s Corp., #MCD [NYSE]
Services, Restaurants, USA
Financial performance of the company:
Index – DJIA, S&P 500;
Beta – 0.49;
Capitalization – 108.94 В;
Return on asset - 13.50%;
Income - 4.53;
Average volume – 7.04 М;
P/E - 24.67;
ATR – 2.52.
Analytical review:
- The company ranks the first on capitalization among the issuers in the sector of “restaurants” traded in the American stock market;
- On Friday 22 March the company issued a report for Q1 of the fiscal year of 2016. According to the press-release, company’s revenue amounted to 5.90 billion USD, which was above the forecast of 5.87 billion USD. McDonald`s stated that net profit in the reported period was 1.23 USD per share against the forecast of 1.16 USD;
- Since July 2015 is focusing business in 4 markets (USA, leading international markets (Australia, Canada, France and Great Britain), rapidly developing economies (China, Italy, Poland, Russia) and potential markets, which can develop with the use of a franchise model;
- In the reporting period the volume of sales in the US market has increased by 5.4% due to such invention as 24 hours breakfasts. The leading international markets rose by 5.4% against 4.2% a year earlier. Rapidly developing and potential markets have increased by 3.6% and 11% respectively
- In the near future the company will carry aggressive expansion in the Asian region. In the next 5 year McDonald`s plans to open over 1500 new restaurants in China, Hong Kong and South Korea;
- Large investment funds and banks (RBC Capital, Argus, Deutsche Bank) believe that the company’s shares will grow up to 135 USD.
Summary:
- Last company’s report significantly increased investors’ confidence to the company. Despite pressure from the strong USD company’s revenue and net profit have increased, exceeding market expectations. McDonald`s has strong growth potential. Development of business in China will increase investors’ confidence as well. Large investment funds expect that company’s shares will grow.
- It is likely that in the near future company’s quotes will go up.
Trading tips for CFD of McDonald`s Corp.
Medium-term trading: the moment the issuer is traded in the demand zone of 124.50-127.80 USD. If the price maintains this zone and n case of the respective confirmation (such as pattern Price Action), we recommend to open long positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly below the signal line. Take profit can be placed in parts at the levels of 128.00 USD, 130.00 USD and 131.50 USD with the use of trailing stop.
Short-term trading: on the chart with the timeframe 15M the issuer is traded between the local support and resistance levels of 125.55 - 126.45 USD. We recommend to enter the market after breaking out and testing of these levels. Positions shall be opened near the signal line and the nearest support/resistance levels. Risk per trade is not more than 3% of the capital. Stop order can be placed slightly above/below the signal line. Take profit can be placed in parts of 50%, 30% and 20% with the use of trailing stop.
