We issued an alert for McDonald's today (NYSE: MCD) it was sold off heavily due to a research note put out by M Science. You can read about the M Science report here - McDonald's.
They think that Hurricanes Harvey and Irma will hurt sales for the current quarter. We think they are completely wrong! We see sales beating the street for two reasons. First, MCD is opening stores galore in China. Second, we think the effects of Irma will drive sales up as more people are traveling and they stop to eat at McDonalds and also they are cleaning up and rebuilding - no time to cook! But they will stop and grab something to eat at McDonald's while running around.
The Dow Jones Industrial Average was powering higher but the drag placed on it by McDonald's resulted in cutting approximately 35 points from the price-weighted Dow DJIA, +0.25%, with its stock down $5.15, or 3.2%--putting it on track for the worst performance among the benchmark's 30 components.
This is the worst one day decline for MCD since July 26th of last year. A $1 move in any one of the Dow components equates to a 6.89-point swing in the equity average.
Again, we saw this as a buying opportunity on overselling. In fact, we went back to look at McDonald's results after Hurricane Matthew at the end of 2016. When MCD reported results after that hurricane it beat the street and the stock jumped. We are anticipating this overreaction/selloff to provide a good return.