MCD Has Burned Doubters In The Past

The world’s biggest hamburger chain’s quarterly profit and revenue missed Wall Street’s estimates, margins contracted, and the fast-food giant warned that the rest of the year will serve up only more operational indigestion. But we’ve seen this movie before — almost exactly 10 years ago — and if past is prologue, MCD’s current relative underperformance might be a once-in-a-decade buying opportunity.

The last time McDonald’s stumbled like this was a decade ago. The jobless recovery following the dot-com recession wasn’t helping matters and — more importantly — the no-carb Atkins diet was all the rage. Fast-food was finished, the thinking went, and the market got pretty down on MCD. At one point, shares fell below $15. During the past decade, MCD rewarded buy-and-holders with a total return of more than 500%. The broader market only doubled-and-change over the same span.

Source: Investor Place

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