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Why McDonald's could be a compelling buy

Talking Numbers

It's been well over a year since shares of McDonald's were this low.

More than two-thirds of McDonald's $28.1 billion in revenues come from outside the United States. In other words, McDonald's is more of a bet on the global economy than it is on the health of the American consumer. So, world markets start to get shaky, it's no surprise that some investors may get shaky about McDonald's, too.

But, here's an interesting thing to note: While McDonald's same-store sales in the US were down 1.4% in the fourth-quarter of 2013, the company's total same-store sales worldwide including the US was down 0.1%. That means the drag on same-store sales for McDonald's was because of the US, not because Londoners stopped craving Big Macs.

"McDonald's did well in 2008 and 2009 when the world was falling apart," says Andrew Busch, editor and publisher of The Busch Update. "Now, the rest of the world's doing fairly well and [McDonald's] is just holding steady."

One of the snags McDonald's had in the US over the last quarter came from its menu options, said the company in its press release:

"In the U.S., comparable sales decreased 1.4% in the fourth quarter, while operating income rose 1%. During the quarter, the U.S. evolved its value proposition with the introduction of Dollar Menu & More and featured new limited-time food and beverage options to increase the relevance of its product offerings. Looking ahead, the segment is intent on optimizing current initiatives by strengthening its focus on menu choice, customer engagement and operations excellence to drive sales and profitability."

One beverage option is causing a lot of headache for franchisees, says Busch on CNBC's Street Signs' Talking Numbers segment.

(Read: When buying stock in gluttony is a good investment)

"They're trying to do this 'McCafé'," says Busch of the company's recent efforts to build on its coffee brand introduced in the US last decade. "The problem is that they're asking the franchisees to machines that are about $13,000. Also, it slows down the traffic to their drive-thru."

"I'm on hold on McDonald's," says Busch. "I'll wait for them to improve before I get interested in them."
 Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, disagrees with Busch and sees McDonald's recent drop as a potential buying opportunity.

While Ross sees McDonald's stock traveling in a downtrend channel since April of 2013, he believes the longer-term charts paint a more positive picture. The stock has stayed above its 150-week moving average over the past 11 years.

(See: CNBC's Restaurant coverage)

"Each time we've touched it, it's been a compelling buying opportunity," says Ross. "Today, that line sits at $92.76. We're right there now for all intents and purposes. I think this is where you want to buy McDonald's if you believe in the story."

To see the full discussion on McDonald's with Busch on the fundamentals and Ross on the technicals, watch the video above.

More from Talking Numbers:

Why now could be the moment to buy stocks
Why bonds may rally for a long time
$450 billion fund manager: Why I'm buying this dip


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