Bought McDonalds MCD at $76.89

 

The Street not only rates MCD a BUY, it also gives the stock its highest rating A+.  Also Credit Suisse rates the stock Outperform.

Here is what the Street has to say about MCD

We rate MCDONALD’S CORP (MCD) a BUY. This is based on the convergence of positive investment
measures, which should help this stock outperform the majority of stocks that we rate. The company’s
strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with
reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Other  reasons why I bought this stock:
1. The debt-to-equity ratio is somewhat low, currently at 0.84,  and is less than that of the industry average.
2. Compared to other companies in the Hotels, Restaurants& Leisure industry and the overall market, MCDONALD’S CORP’s return on equity significantly exceeds that of both the industry average and the S&P 500.
3.  46.30% is the gross profit margin for MCDONALD’S CORP which I consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.00% is above that of the industry average.
4. MCD has a growth score better than 90% of the stocks The Street rates.
5.  The company has generated more income per dollar of capital than 90% of the companies The Street rates.
6. Low stock price volatility.
7. Dividend yield is 3.16%

ABOUT MCD: McDonald’s restaurants serve a varied, yet limited, value-priced menu in more than 100 countries worldwide. All restaurants are operated either by the Company or by franchisees, including conventional franchisees under franchise arrangements, and foreign-affiliated markets and developmental licensees under license agreements. Independently owned and operated distribution centers, approved by the Company, distribute products and supplies to most McDonald’s restaurants.

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Sell SLV at $27.70

SLV has had a long good run, I’m up 42% since 09/08/10 when I bought the ishares at $19.5499. Now I’m ready to sell.

Options trades are now showing concerns about silver. Bearish puts on the iShares Silver Trust (SLV) are at unusually high levels, according to a new report by Brendan Conway for Dow Jones Newswires.

Day two of the correction in metals with gold down nearly $30 as of this post and silver retreating by almost 5%. The saying goes that metals take the escalator up and the elevator down.

“The market fears that the increase in Treasury yields will soon push real yields back in positive territory,” says MF Global precious metals analyst Tom Pawlicki. “The developing trend of higher stocks, dollar, and yields signals economic growth. That would take away the need for previously bullish drivers like safe-haven or more quantative easing.”

Another reason for selling SLV is China and what they plan to do with interest rates. If they do raise interest rates, as expected, that could slow investment demand in precious metals.

Downside Risk
Downside risk has been above average. SLV has a draw down risk of -95.13%, which is the largest price decline experienced over the last three years. – Source: The Street Ratings

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KR gets Hammered after Reporting 5.7% Sales Increase

Full Disclosure: I own 1000 shares in KR, which is my full investment goal for KR. My cost basis is $22.70. I plan to keep my position.

All told, sales were up 5.7% including food, excluding fuel sales were up 3.1%, yet the stock was down more that 10% at one point today, it is down 9.51% at the time of this post. Despite earnings improvement, a sales increase, cost reductions and an increase in dividends, Kroger gets hammered due to a lack of improvement in pricing and a statement from CEO Dillion that the economic recovery is slower and weaker than we anticipated.

When will CEOs learn to stop throwing cold water on a otherwise solid report. Dillion must be taking his talking points from CSCO CEO John Chambers.

There is a trend developing, the company announces earnings, the stock drops 10%. Take a look at this chart.

Earnings Improved!
Net earnings for the third quarter of fiscal 2010 totaled $202.2 million, or $0.32 per diluted share. In the third quarter of fiscal 2009, Kroger reported a net loss of $874.9 million, or $1.35 per diluted share.

“Kroger’s customers today are looking for lower prices and a great shopping experience, and our Customer 1st strategy delivers all that and more,” said David B. Dillon, Kroger’s chairman and chief executive officer. “Our team increased identical supermarket sales, earnings and earnings per share in the third quarter while controlling expenses to keep prices low for our customers. These results show Kroger’s strategy is working and that our core grocery business is strong and resilient.”

Costs were down
Including Kroger’s retail fuel operations, operating, general and administrative (OG&A) costs were 17.11% of sales, a decline of 65 basis points compared with the third quarter last year.

KR Narrowed Earnings
For full-year net earnings, Kroger narrowed its guidance range to $1.65 to $1.78 per diluted share. The Company is striving to achieve results in the upper half of this guidance range. The previous range was $1.60 to $1.80 per diluted share.

“Our enthusiastic Kroger team shines during the holiday season, and we expect a solid end to our fiscal year,” Mr. Dillon said. “We remain focused on delivering sustainable earnings growth today for our shareholders while investing for the future. In addition, Kroger’s stock buyback program, debt reduction, and recent dividend increase in September demonstrate our ongoing commitment to creating value.”

Kroger, the nation’s largest traditional grocery retailer, employs more than 334,000 associates who serve customers in 2,461 supermarkets and multi-department stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry’s, King Soopers, QFC, Ralphs and Smith’s. The Company also operates 784 convenience stores, 375 fine jewelry stores, 954 supermarket fuel centers and 40 food processing plants in the U.S. Kroger, headquartered in Cincinnati, Ohio, focuses its charitable efforts on supporting hunger relief, health and wellness initiatives, and local organizations in the communities it serves. For more information about Kroger, please visit www.kroger.com.

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Still Looking to buy MCD at $77.50

Yes, based on the chart McDonalds could hit my strike price in the next two weeks. I am continuing to have my BUY order on MCD at $77.50.

I really like the Chinese market for MCD. McDonalds (MCD)  is planning to open 500 new stores in China over the next three years. Currently MCD has about 1500 store in China.

Big Mac in the US cost $3.71, and a Big Mac in China cost $2.18 at October 14, 2010 currency exchange rates. McDonalds is raising prices in China due to increasing commodity prices. If MCD is able to pass on higher prices to the Chinese consumer, which is likely, then MCD will be able to maintain gross margin forecasts on food.

Ford Equity Research has a BUY rating on MCD which was reiterated on 11/19.

We project that McDonald’s will outperform the market over the next 6 to 12 months. Thisprojection is based on our analysis of three key factors that influence common stock performance:earnings strength, relative valuation, and recent price movement.

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Lowering Strike Buy Price on MCD to $77.50

A One Year Chart of MCDonald's (NYSE:MCD)

I currently have an Open Buy 100 shares MCD ‘Mcdonalds Corp Com Limit $75.00, but the stock is not coming down fast enough to get it before November 29th the x-divident date. It doesn’t look like MCD will fall below $75 anytime soon as it has bounced off the $78 level two time in the last month. I like the McDonald’s story. Great international exposure, especially in China. Looking for a pullback to get in. This will be my first purchase of MCD. The x-Divident date is November 29 and the current yield is 3.15%

Three Month Chart of MCD

McRib Sandwich

Since this is a long term income buy with strong growth potential, I am going to take a bite and lower my strike price to $77.50 per share, in effect after today’s market close during aftermarket hours.

Additionally, the Street has an A+ rating on this stock, which is its highest rating. We rate MCDONALD’S CORP (MCD) a BUY. This is based on the convergence of positive investmentmeasures, which should help this stock outperform the majority of stocks that we rate. The company’sstrengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth inearnings per share, notable return on equity and expanding profit margins. Although the company mayharbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. – the Street

Latest on MCD, they do have some pricing power in China. From Reuters, “McDonald’s has raised menu prices in mainland China by 0.5 yuan to 1 yuan per item with immediate effect because of rising materials costs as the country.”

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Stock Order Change – EMC, MCD, RFMD, CSCO, CVX, FTR

I just updated my stock orders. Now that the elections  are over and the fed is printing money, I have modified my trades to the following:

Summary 2 Sell orders and 5 buy orders.

Sell 200 EMC ‘E M C Corp Mass Com Limit $22.00 – This stock is hitting new 52 weeks highs, I still will hold 500 shares after the sale. I may buy more on a pullback to $20.50.

Open Buy 1000 RFMD ‘Rf Microdevices Inc Com Limit $6.00 -rode this stock up 21% in 29 days. Waiting for another pullback. I have owned RFMD in the past.

Open Buy 100 MCD ‘Mcdonalds Corp Com Limit $75.00 – I like the McDonald’s story. Great international exposure, especially in China. Looking for a pullback to get in. This will be my first purchase of MCD.

Open Sell 200 CSCO ‘Cisco Sys Inc Com Limit $27.50 – Cisco has been my best performing stock over the past 2 decades. I have gotten in and out of this stock at peak times. If this stock hits my strike price in the next month or so, I want to sell half of my holdings and wait for another pullback to buy more.

Open Buy 50 CVX Chevron Corporation Limit$ 80* – I hope to be buying this for my retirement account on a pullback to $80, where it will pay a dividend of over $3.5%. This will be in addition to my position in CVX

Open Buy 500 FTR Frontier Communications Limit 8.40* – This also if for my retirement account. A pullback to the $8.40 area will yield this stock around 8.5% – this would be my first position in this stock.

Open Buy 600 MO Altria Group Inc. Limit 23* – Adding to my retirement account, a pullback to $23 is a stretch, but if it does, it will yield over 6%.

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TRAD up 8% on IBG LLC Investment

According to theflyonthewall.com, IBG LLC reported a 6.3% stake in Tradestation. Tradestation was trading up 8.26% to $6.18/sh at the time of this posting.

IBG, according to Bloomberg, IBG LLC operates as an automated global electronic market maker and broker. The company provides broking services for exchange-listed options, stocks, bonds, and futures. IBG LLC was formerly known as Interactive Brokers Group LLC and changed its name in November 2006. The company was founded in 1982 and is based in Greenwich, Connecticut. IBG LLC operates as a subsidiary of Interactive Brokers Group, Inc.

Full disclosure: I own shares in TRAD

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Trade Execution buy 1/4 INTC at $19.50

On 10/13 at 1:25 PM I bought 25% more of my target in INTC.

Credit Suisse calls Intel a better company than a stock and states in its October 12, 2010 report, “Longer term holders should be buying.” CS has a target price of $28, “We maintain our Outperform rating and $28 PT which represents a 14.4x P/E multiple to our 2011 est in-line with its 5 yr FY2 avg. of 15.2x.”

The Street has a target price of $25.46 since 10/7/10. Additionally, The Street stated, “The gross profit margin for INTEL CORP is currently very high, coming in at 77.80%. It has increased significantly from the same period last year. Along with this, the net profit margin of 26.80% is above that of the industry average.”

During the same period, stockholders’ equity (“net worth”) has increased by 17.39% from the same quarter last year, yet the stock is down from last year. The stock price clearly is not reflected in the results of INTC.

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Review Order Status MO, CVX, INTC, CSCO

Beaglefolio
Buy 1/4 INTC at 19.50
Sell 1/4 CSCO at 27.50

CSCO one month chart.

IRA – Retirement
Buy 1/2 MO at 23
Buy CVX at 80

MO one month chart

Comments:
Beaglefolio
INTC – IT spending, driven by aging computers and bandwidth-consuming applications for PCs and servers will provide healthy demandfor microprocessors. S&P’s 12-month target price of $25 is based on PE expansion to 12x. Bonus: The dividend yield over 3%.

CSCO – With a higher PE ratio than INCT and no dividend yield, I plan to dump more CSCO when it approaches it’s 52 week high.

IRA – Retirement
Currently selling all investments which pay no yield and replacing them with good, stable yielding stocks such as ED, MO and CVX. I also hold good yielding stocks in my retirement sch as CAT at 2.22%, PM at 4.48%. Looking for a dip to pickup more MO and CVX.

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Trade Execution Buy 1/4 ED at $48

Consolidated Edison Inc. (ED:NYSE) Bought $48.00 Settles on 10/13/2010 12:35 PM 10/07/2010

I am currently buying high dividend yielding stocks, including ED, for my retirement account. If taxes are going up on dividends, then I am going to shelter that income. ED is paying 4.94% and has buy ratings from The Street. This gives me 3/4 of my target position in ED.

Highlights: ED’s revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year
prior, revenues slightly increased by 6.0%. This growth in revenue appears to have trickled down to the
company’s bottom line, improving the earnings per share.

CONSOLIDATED EDISON INC has improved earnings per share by 16.4% in the most recent quarter compared
to the same quarter a year ago.

S&P Rates ED a hold with a 12-month target price of $45, reflecting a premium-to-peers P/E multiple
of 13.5X their EPS estimate for 2010. They rate insider trading as FAVORABLE and claim technicals are BULLISH

Additional information on ED
ED has three unregulated subsidiaries: Consolidated Edison Solutions, which sells electricity and gas to delivery customers of utilities; Consolidated Edison Development (CED), which acquires, develops and operates generating projects; and Consolidated Edison Energy, which enters into financial and commodity instruments as part of its wholesale energy trading activities. In December 2007, CED agreed to sell 1,706 megawatts of generation projects for $1.477 billion in cash. The two-stage transaction was completed during the second quarter of 2008. The sale resulted in total cash proceeds, net of estimated taxes and transaction expenses, of $1.067 billion, and a net after-tax gain of about $400 million. The company used the proceeds for the repayment of debt and investments in its businesses.

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