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08-02-2012, 09:44 PM
(This post was last modified: 08-02-2012, 09:50 PM by valuehunter.)
Mcd just posted a 6.7% comp sales growth in jan. A commendable performance given the troubles in Europe. In fact comp sales in Europe managed a 4% growth. It also appears to be gaining market share in its backyard. At last done price of $100.91, question is whether market has overpriced the counter? At a pe of 19.1 based on full year diluted eps of $5.27, it certainly doesn't look cheap. However compared to its competitors sbux and yum, it does appear reasonable. Either that or the entire industry is overpriced. My opinion is that given mcd's long history of uninterrupted increasing dividends, competent management and its promising growth prospects, it appears to be an attractive business at a fair enough valuation.
Not intended as an invitation to buy or sell the counter. Do your own due diligence. Would be good if vb forumers can share your views as well.
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Mcd has a very impressive growth rate... and a good net margin of bout 30%
there was a warren buffett talk to students, he say he would rather buy coke than mcd, due to many reasons...
but from the current situation, seems mcd has much more growth potential than coke.
recently read news, Mcd's fries can remain in original colour even after months... compared to other fries, which molds.
and their beef is rumoured to contain special chemicals
see how good is their "innovation"?
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IMO, Mcd has a very good captive customer strategy - in the form of Happy Meal. 
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(09-02-2012, 05:19 PM)Thriftville Wrote: Mcd has a very impressive growth rate... and a good net margin of bout 30%
there was a warren buffett talk to students, he say he would rather buy coke than mcd, due to many reasons...
but from the current situation, seems mcd has much more growth potential than coke.
Yup, i've also seen the video several times. While MCD does offer good growth potential, esp in China (just look at YUM's recent results in China), one should not forget that KO has also been chugging along just fine. While the per capita consumption of KO products is roughly 675 servings in Mexico and 394 in the States, the corresponding numbers are 34 and 11 in China and India respectively. There is tremendous scope for growth in these two hugh markets.
The reason why the share price of KO has remained largely stagnant the past 10 years or so, i guess, is largely because it was grossly overpriced back then. However the business has not remained stagnant. In fact there is a consistent increment in volume sales, revenue and EPS during this period, so much so that its PE now has fallen below 20 (17 - 18 the last time i checked). Its most recent commendable results is a testament to its growth story and the resilience of its business in trying economic times. As a sidenote, it is also worth mentioning that every time someone buys a meal from MCD, most likely it will also come with a coke, sprite etc.
I could go on and on but i may be biased and this thread is for MCD in the first place. Just in the mood to share and ramble on. Forummers still need to conduct your own due diligence.
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The appearance of Mcvalue lunch and now a whole day value meal (From $6 a meal drop to $4.50) implies the level of competition in the industry. Is this the same circumstances worldwide? I am not sure but when I went to Australia, it does have value meal. Is this because that it is the lowest cost producer from using low quality and cheap raw materials as well as economics of scale enjoy from its worldwide operation?
Hope these questions can help you further explore the underlying business of MCD
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I remember hearing from someone or reading somewhere that the reason why fast-food is such a great business is this:
In poor countries, it represents an affordable luxury. In rich countries, it's the cheapest thing to eat. Which is why MCD and KFC does so well in most places.
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11-02-2012, 09:23 AM
(This post was last modified: 11-02-2012, 09:23 AM by weijian.)
(10-02-2012, 09:02 PM)kazukirai Wrote: I remember hearing from someone or reading somewhere that the reason why fast-food is such a great business is this:
In poor countries, it represents an affordable luxury. In rich countries, it's the cheapest thing to eat. Which is why MCD and KFC does so well in most places.
yup, i picked up that same thing somewhere (which i cant remember where too)
Specifically, it is something like:
If the current trend persists (the gap between both economy type reduces), then it is a win win situation for fastfood operators.
As the emerging economies get richer, they consume more fastfood. As the developed countries get poorer, they consume more fastfood too.
P.S. Reading and writing this thread, makes me hungry already..
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Mcdonald's posted a 7.5% rise in global comparable sales in Feb.. Compare this to the 3.9% rise this time last year and 6.7% rise in jan 2012. Looking at Mcdonald's performance in the US, it seems to be gaining market share in its backyard. In fact, one can also scrutinise the global comp sales record over the past few years..clearly Mcdonald's is still growing nicely.. Potential investors may want to look at the history of this company and how far it has come since its founding days...
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Warren Buffet's once shared his view on McDonald's business
"McDonald's has a lot of things going for it. But it is a tougher business. People do not want to eat at McDonald's every day. If someone drinks 5 Cokes today, they will probably buy 5 more tomorrow. The fast food business is tough, and they don't win taste tests. They are also competing on price more than they used to, and they give away toys in order to sell more product. It is better to own a business with a product that can stand alone absent promotions and price appeals. But it is a very good business. Not as good as Coca-Cola, but then again very few businesses are."
He doesn't invest in McDonald right now. What is your view on that? Do you think McDonald is a good business to invest in?
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I think i read somewhere that he sold McDonald when he bought Dairy Queen to avoid conflict of interest.
Anyway isnt this good enough... "But it is a very good business. Not as good as Coca-Cola, but then again very few businesses are."
Dont own MCD now but will very likely do so in the future
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