Long-Term Trading Idea for McDonald’s (MCD)

04/06/2010 12:01 am EST


I've previously written that I preferred the safety of McDonald's (MCD) stock over Apple (AAPL). Following the rally in AAPL shares ahead of the iPad product release, I continue to like MCD for a two- to five-year time horizon.

Taking a quick look at the MCD fundamentals, we see a P/E around 15, very nice profit margins in the 20% area, quarterly revenue growth around 7%, quarterly profit growth around 23%, and dividend over 3%.  And the bottom line is that MCD is a safe global play, in my view, no matter the worldwide economic conditions.

Click to Enlarge

On the charts, MCD has just had a multi-year breakout to new highs, which we see on the above chart. I previously discussed MCD bullishly in August and September of 2009, and it's rallied quite a bit since that time. However, this breakout of the multi-year range between roughly 50 and 65 should provide support for the stock on pullbacks.

The long-term buy rating is still intact. 

Full disclosure: I have no personal holding in MCD and no short-term trading recommendation currently.

By Moby Waller of BigTrends.com

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