McDonald’s (MCD) Offering Possible 11.11% Return Over the Next 7 Calendar Days

McDonald's's most recent trend suggests a bearish bias. One trading opportunity on McDonald's is a Bear Call Spread using a strike $185.00 short call and a strike $190.00 long call offers a potential 11.11% return on risk over the next 7 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $185.00 by expiration. The full premium credit of $0.50 would be kept by the premium seller. The risk of $4.50 would be incurred if the stock rose above the $190.00 long call strike price.

The 5-day moving average is moving down which suggests that the short-term momentum for McDonald's is bearish and the probability of a decline in share price is higher if the stock starts trending.

The 20-day moving average is moving down which suggests that the medium-term momentum for McDonald's is bearish.

The RSI indicator is at 70.35 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

LATEST NEWS for McDonald's

GrubHub Stock Will Benefit from Increased Competition
Wed, 06 Mar 2019 17:06:23 +0000
Once a high-flying stock, GrubHub (NYSE:GRUB) has suffered in the last year. GRUB benefitted from its first-mover status as restaurants all over the country signed onto its food delivery service. However, increased competition has hurt profits. GrubHub stock lost about half of its value as profits fell despite impressive revenue increases.Source: Shutterstock GrubHub faces further pressure as DoorDash and UberEats parent Uber make plans to sell stock on the major exchanges. However, these competitor moves have ironically made GRUB a buy. * 9 Trade War Stocks to Sell on U.S.-China Deal News GrubHub's RevolutionSince its 2014 IPO, GrubHub stock has been the only equity in the delivery space to trade on a public exchange. Now, with an upcoming IPO from both DoorDash and Uber, GRUB stock will face competition in the markets.InvestorPlace – Stock Market News, Stock Advice & Trading TipsGrubHub prospered for years by democratizing food delivery. Before GRUB, pizza companies such as Domino's (NYSE:DPZ) or Papa John's (NASDAQ:PZZA) made up most of the food delivery business. Thanks to GrubHub, this expanded to the likes of McDonald's (NYSE:MCD), Chipotle (NYSE:CMG), and every other restaurant imaginable, including family-owned establishments. Today, GrubHub serves more than 80,000 restaurants in over 1,600 cities across the U.S. New CompetitionNow, competitors have entered the market, and profits have fallen despite massive revenue increases. The $1.0 billion in revenue for 2018 represented a 47% increase from 2017 when the company brought in $683.1 million. Despite this increase, profits fell by 21%. Moreover, the company missed both earnings and revenue estimates in the fourth quarter.Peers have also taken market share amid the falling profits. However, GrubHub maintains its lead position. GrubHub held a 43% market share in deliveries. This compares to 31% for DoorDash and 26% for UberEats.Now, this battle moves to the stock market. With these peers launching IPOs, the competition now will likely have a more direct effect on GRUB stock. Of its peers, DoorDash may constitute a more significant threat. DoorDash has seen the largest market share increases. Moreover, the latest round of fundraising values DoorDash at $7.1 billion, the approximate market cap of GrubHub stock. DoorDash IPO and GrubHub StockHowever, this may signify an opportunity in GRUB stock. Despite the market cap parity, GRUB offers more value with its larger market share. Moreover, GrubHub has managed to turn a profit since the beginning. Conversely, DoorDash CEO Tony Xu says the company will delay profitability to focus on growth.Also, once the DoorDash IPO hype calms down, the profit factor favors GrubHub stock. After its stock starts to trade, DoorDash could turn to dilution and devalue its stock to fund its push for more market share. Investors will less likely face this concern in the profitable, more established GrubHub.Furthermore, with industry expansion in high gear, all food delivery companies, including GRUB, will see high growth rates. Increased competition hurt GrubHub in 2018 and this year. However, in 2020, analysts expect double-digit earnings increases to return. Wall Street expects profits to rise by 57.4% in 2020. They also see average earnings increases of 24.7% per year over the next five years.The price-to-earnings (PE) ratio now stands at about 92.2. Given this metric, one can understand why investors sold off GrubHub as profits have fallen. However, when looking at forward earnings, the multiple drops to around 35.3. This multiple appears reasonable when compared to GRUB's predicted growth rates. Final Thoughts on GrubHub StockThe fear inspired by DoorDash gives investors a reason to bite into GRUB stock. Yes, both GrubHub and its stock have suffered as peers continue to take market share. Still, with massive revenue increases in the overall industry, GRUB should continue to benefit from its industry's high growth rate.In the March 4 trading session, GrubHub fell by about 7% on no news. I think the upcoming DoorDash IPO has driven this drop, and I see the decline as a buying opportunity.I expect DoorDash will become GrubHub's principal competitor and its only pure peer in the stock market. Still, DoorDash's faster growth will come at a cost to the balance sheet, and perhaps DoorDash stock itself. With fewer risks and a high rate of profit increases, I see GrubHub stock as the safer and, longer-term, more profitable bet.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Blue-Chip Stocks That Will Lose You Money * 7 Cheap Stocks Under $5 That Could Soar * 7 Stocks Under $10 You Shouldn't Buy Compare Brokers The post GrubHub Stock Will Benefit from Increased Competition appeared first on InvestorPlace.

Stock Losses Deepen As These 2 Hot Chinese IPO Stocks Sell Off
Wed, 06 Mar 2019 15:44:03 +0000
The major stock indexes were squarely lower in today's stock market. Hot Chinese IPO stock Nio crashed almost 20% in early trading.

Exchange Traded Funds: How To Find The Best ETFs
Wed, 06 Mar 2019 15:00:27 +0000
How can you find the best ETFs to buy and the right ETF investing strategy? Start with unique screens, ETF performance updates and ETF news from IBD.

3 Restaurant Stocks to Win Big From Booming Delivery Sales
Wed, 06 Mar 2019 13:37:01 +0000
Restaurants are now using digital ordering and delivery systems, sometimes in collaboration with third-party delivery partners to reach customers and rejuvenate sales.

McDonald's ad agency loses two rising creative talents to OKRP
Tue, 05 Mar 2019 20:50:10 +0000
The McDonald's ad agency We Are Unlimited is broadening its focus beyond the burger behemoth, and OKRP looks to have benefited from the shift.

Related Posts

 

MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.