We sold one our largest positions in the portfolio, MCD, two days ago. This morning the stock is under pressure from a downgrade.” I have to admire how efficient the market is. I say that sarcastically. Note the target price is $100, well below the price it’s trading at. Coupled with a 3.3% solid secure dividend yield, McDonald’s is a fantastic investment. We’re traders, though, and the charts were looking toppy so we sold with the idea we could buy back later. We’ve done this a few times this year on McDonald’s. Eventually we might lose it as McDonald’s might be worth a lot more than $100 if interest rates stay this low for a long time. We have sold puts on the stock in order to create a lower entry point. This is one of our favorite strategies and if you are interested in how we do this, read further here.
| McDonald’s downgraded to Neutral from Buy at Janney Capital | |
| Janney said industry sources indicate U.S. burger-sector same-store-sale comps for the first 2-3 weeks of September are on pace to be the worst month for the year. In addition, the firm downgraded McDonald’s due to valuation and believes Street estimates may be too aggressive. Price target is $100. :theflyonthewall.com | |