Dogs of the Dow #2: McDonald’s (MCD)
Click to Enlarge McDonald’s (MCD) has been mired in a downtrend channel since April, setting a pattern of lower highs and lower lows as investors lose interest in the fast food giant amid stagnant same-store sales growth, rising competitive pressures and what its CEO warned is a “very soft” environment right now.
Other concerns include a somewhat loopy initiative to sell McCafe-branded coffee in stores, a focus on keeping prices down amid a nervous consumer base, and an ongoing labor clamoring that resulted in a 100-city strike against fast-food wages on Thursday demanding $15-an-hour wages.
MCD is already lagging the market at 8% returns this year. I’m looking for shares of this Dow dog to drop to at least $92 a share — a 4%-plus loss from here.