McDonalds - Up Down All Around
As you may recall, back on September 12th, we went against an analyst at M Science who came out with what was essentially a downgrade of McDonald's (NYSE:MCD). While M Science thought that the hurricane's would negatively impact MCD earnings we thought the exact opposite. We stated in our blog that we thought their rational was wrong and McDonald's would actually do because they would only be impacted for a short duration (days) and people would be traveling and working on repairing their homes and thus would eat out more. We issued an alert on MCD and we were right, profiting on the alert.
We have talked before about how you can have twin brothers that were raised identically, went to the same schools and had the same level of experience in the markets - but even so one will tell you the markets are doomed and headed down while the other will tell you blue skies ahead the markets heading higher.
McDonald's is a great example because today Longbow analyst Alton Stump upgraded McDonald's to Buy with a $183 price target following better than expected Q3 US comp trends.
This analyst raised estimates and said shares deserve to trade above its historical multiple given the ongoing turnaround story in both the US and internationally. So we are sure both firms have excellent reputations and analysts but here is a clear example that there can be expectations diametrically opposed on the same data. It is a best guess! We try to eliminate that with 90% technical analysis and 10% market news. So far we have had a very good year.
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