An Intriguing Opportunity in a Fast-Food Leader

  An Intriguing Opportunity in a Fast-Food Leader Dear reader, I have several passions in life – the stock market, travel, sports, fitness, great food, and healthy living are a few. This month will be spent incorporating them into my days. As you know, I’m traveling overseas in Europe right now. That checks off the travel box. I have gotten to watch some European fútbol in Portugal and Spain (sports, check!), eat lots of the great food that this side of the pond has to offer (food, check!), and walk the streets and work out in my free time (fitness, check!). And of course, I’ve spent lots of time writing and researching for my investment newsletters and upcoming book (stock market, check!). Clearly, I’m having a great time. During one of my long morning walks through Madrid, I noticed that I was passing several American fast-food establishments. One in particular stood out – McDonald’s (MCD). I’m almost positive that you’ve heard of it. McDonald’s is the 11th most valuable brand in the world and the largest restaurant owner-operator on the planet. The company has more than 42,000 stores across 115 regions and brought in systemwide sales of $130 billion last year. As I mentioned, I enjoy living a healthy lifestyle. But that doesn’t mean I don’t succumb to fast food on occasion. I have a weird obsession of wanting to try fast-food offerings in other parts of the world. So I ordered a Big Mac at the Madrid McDonald’s. And I must say, it wasn’t as good as I expected. But I’ve certainly paid much more money for far worse burgers. My review of a Big Mac isn’t why I’m writing to you today, though. Instead, I wanted to share my experience… Let’s start with the ordering process. I ordered my food on a large touchscreen without any interaction with a human. I simply entered my table number and had my food delivered to me. That was the extent of my human contact. A quick nod and “thank you.” Ultimately, the process was very simple. I suspect it leads to fewer mistakes than when a human takes your order. It was an enjoyable experience that will lead to faster delivery times and lower overhead costs since restaurants will be able to operate with fewer employees. As fast-food wages increase in the U.S. – especially in states like California – cutting wage expenses will act as a big boost to companies’ bottom lines. As is often the case with me, I headed back to my flat after my meal and immediately began researching McDonald’s further. Two big factors stood out… The first is that the stock is down about 16% from its January all-time high and now sitting just above its October lows after rallying on Wednesday. That’s not necessarily a bad thing, though. Historically speaking, besides the 2020 pandemic pullback, McDonald’s has typically begun a new rally after pulling back between 15% and 17%. And that’s exactly where the stock is today. The second factor that intrigued me was McDonald’s launch of the $5 Meal Deal on June 25. It’s expected to run for a month but could be extended. According to Wells Fargo, the $5 Meal Deal offers a 40% discount on core menu prices. This is important because over the past 20 years, McDonald’s stock has outperformed the S&P 500 by 75% in the four months following a menu deal launch. If history repeats itself, we could be in for higher prices soon. It’s no secret that food inflation has been a major concern among average Americans recently. It’s also no secret that we all love a good value. As a result, I believe McDonald’s is launching this new value menu at the ideal time. The stock currently boasts a forward price-to-earnings (P/E) ratio of 18.5 – its lowest valuation outside of the pandemic pullback since 2015. Add in its 2.7% dividend yield and this stock looks very attractive as a long-term core investment. Now, I realize that McDonald’s may be a “boring” investment idea to some of you. I typically focus more on innovation type of investments. But finding opportunities across all areas of the market is my passion. Today, that’s exactly what I believe I’ve found in McDonald’s. I don’t own shares of the company yet. But I may consider adding some to my portfolio in the near future. Here’s to the future, [McCall's Signature] Matt McCall Editor, Market Insights [Check Out My Latest Podcast]( The Crypto Fear & Greed Index has fallen to a level it hasn’t seen since 2023 when Bitcoin (BTC-USD) was trading at just $17,000. Today, it’s worth $57,000. Is now the time to panic? I don’t think so. On the [latest episode of the SteadyTrade Podcast]( Tim Bohen and I discuss the recent pullback in the world’s largest crypto and explain why we expect it to be short-lived. Several potential catalysts are on the horizon that could send Bitcoin and the broad crypto market higher. 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