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Sunday, February 9, 2014

McDonald's Faces 2 Major Risks

Ah the Golden Arches of McDonald's (MCD). Perhaps the most recognizable brand on the globe. And how could it not be? It is the world's largest chain of hamburger style fast food restaurants, serving around 70 million customers daily in 120 countries. We know the MCD primarily sells hamburgers, cheeseburgers and french fries but also offers a wide variety of breakfast items, soft drinks, milkshakes, and desserts. Some see the growth continuing organically. Responding to consumer demand for healthier options the company has expanded its menu to include salads, fish, wraps, smoothies, oatmeal and fruit. New menu items appear monthly it seems, as do varying combinations of value menus and deals. MCD continues to push to be the top dog in the fast food space, and has done an amazing job at that. The stock currently trades at $95.80 with a p/e of 17 and pays a juicy 3.4% dividend yield. Today we learned that the stock was upgraded by Morgan Stanley (MS) and in this article I want to address the upgrade and raise two concerns before investors pile into the stock on the upgrade. We learned today that........READ MORE

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