Why MCD is a discount buy...

Alright, for those that know me, you're probably laughing. "Oh, God - Adam is buying McDonald's." My brother even chuckled when he said, "And when you'll buy it you'll pump the stock by buying dinner."

First off, shut your pie hole. I'm not even a fan of the corporation so I'm not personally invested in it, just mathematically invested in it. I bought five shares today at around $200. But here are some points that I consider MCD a buy for an easy 10% profit, hear me out:
  • MCD is going through a new CEO change. Steve Easterbrook was ousted due to bad behavior. Following with the summer earnings report, the CEO of the burger gods got in trouble for having a "consensual relationship" with an employee, which is against company policy. Let's not forget to mention heavy drinking during social gatherings with upper management leads and rumors of office flirtation that became awkward. Harvard Business grad Chris Kempczinski took the crown as the new president and CEO early November. It's been a rough year for the company but with the new Catholic CEO, things are planned to change. With a conservative view of new management tied in, I'm thinking that's a big plus for the company. People with money like knowing their companies are sound. Finding out that the new CEO leans conservative gives me better assurance the company is in good hands. 
  • MCD fell short of the earnings report in late October. The blame falls on several things, including the push for plant-based burger selections (which they got into late in the game) and Popeye's craze for their new chicken sandwich. Regardless, the investors didn't like it and called it quits on the burger chain, making it fall almost $30 after the report. To me, this is where the discount trough begins. By analyzing the chart, it's been roughly 10 months for recovery and we're at the bottom of that wave after three months. I'm thinking the next five months is where we're going to see some serious gain.
  • My last point is pretty straightforward: it's McDonald's! You can pass by any street corner and see a pile of customers receiving their food. To many it's a large part of their regular diets and lifestyle. Combined with free wifi, quick service and an overall cleanliness style, I still consider the company to be sound. But why buy now? Look at the chart. MCD is in the maximum amplitude of a bad earnings trough. I'm predicting it's going to ride up the crest and pass above it's original price it had in the summer. What's the predicted return? I'm guessing close to 10%. I'm thinking that's easy money. To me, an easy C note.

Stock tip: buy MCD
Possible return: 10% by May, 2020


Disclaimer: I am not a financial advisor. I have no proper training in finance or consider myself an expert in money and finance. This blog is just my personal journey in gaining control of my money, my life and sanity. I don't expect you to get rich but I hope you will turn out successful with your finance management. I hope these tools, tips and strategies helps someone out there as much as they have helped me. Please contact me for any concerns. - Adam

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