By the time the Fed lets interest rates rise above the yield of the MCD dividend, the stock price will be substantially lower than it is today - all other things being equal. Stocks that are held primarily for yield are essentially surrogates for bonds, and bonds fall as interest rates rise. MCD is no longer a "growth" stock, thereby making it an "income" vehicle instead. MCD still has a fairly strong balance sheet, and I don't foresee any problems with their ability to continue to pay and grow the dividend. However, I believe the rate of growth of the dividend will slow considerably from the historical rate. The scheme to borrow a huge amount of money to buy back stock and pay a big "special" dividend to shareholders strikes me as lunacy. It will weaken the financial stability of the company and could result in a lower credit rating. To borrow money to pay it to the shareholders is a recipe for disaster.
The bad news you've seen is just the tip of the iceberg. The prospect of rising interest rates, food scares in China, a growing reputation for horrible service, problems with the NLRB, management that spends too much time in the company jets and a host of other problems will keep pressure on MCD stock for the foreseeable future. Heavy dependence on China and Russia could prove to have been a huge mistake.
MCD is learning about the risks of doing business in Russia, China and other countries that are fundamentally unfriendly toward the U.S. They hate us, but they love our money. They love our money so much that they, and their friends in North Korea, print tons of it every year.
My intuitive assessment is telling me that a breakout above $10 will set up an assault on the 52-week high of $12.95. If $12.95 is broken convincingly, the shorts will start capitulating in droves. If (and when) that happens there's no way of knowing where this thing might go. At this point, Dr. Frost and his group of insiders are really holding all the cards. They could, if they want, buy the whole company, sell the company to an outside buyer, or just continue along the present course of steady, gradual accumulation. The wild card is the institutional investors. I suspect that it would take a very substantial premium for an outside buyer to offer for any takeover to happen. Dr. Frost's past record speaks for itself. The rich get richer (and I don't mind joining them.)
Even though I'm long, I don't see any "momentum" in either direction. I've been in and out several times and made money each time, but OPK is stuck between 8 and 10 at the moment. My guess is that the present pattern is setting the stage for an eventual breakout on the up side. My experience tells me that a move above the 52-week high could catapult the stock to the high teens very quickly once that happens. The continual insider accumulation and the big outstanding short interest makes this an extremely dangerous stock to be short. IMO, the odds favor the longs.
Doesn't matter. I stopped paying any attention to these analyst ratings long ago. They throw darts, flip coins, listen to Jim Cramer and watch which way the dog is facing when it takes a dump. They always use double-talk so they always come out being half right and half wrong no matter what happens.
There's a lot more to it than fast service, but fast service doesn't hurt. MCD's problems are more wide-spread and fundamental than just service speed. MCD reminds me of GAP (The Great Atlantic and Pacific Tea Company, now known as A&P). GAP was once the biggest retailer in the world with over 16,000 stores. The company was thought to be invincible, just as some shareholders think of MCD now. It was the quintessential "widows and orphans" investment, almost like US Treasuries for safety. GAP management became complacent, just like MCD management is today. Granted, that was then, and this is now, but every company has its day of reckoning. I wish I had a dollar for every company that got to the top of the mountain only to slide down the other side. MCD appears to be on a very slippery slope if they don't get their act together very soon.
Anything's possible. Concerns over rising rates this fall make that a distinct possibility, but I suspect it'll hold in the 92-89 area.
Don't worry... modern computers are fully capable of doing all the complicated math calculations to make sure you get your fair share of the distribution. My only concern is seeing the unit price go higher.
IMO, rising interest rates are almost as much a certainty as death and taxes. It's only a matter of when, not if. When the Greenspan Fed raised rates they did it way too fast and way too much. I suspect the present Fed Board has learned a lesson from that debacle. We'll see.
You're all right... a split does absolutely nothing for the overall value of the partnership. Berkshire Hathaway has proven that it's not necessary to split the price for a stock to go up. GOOG, PCLN, AMZN, and a host of other companies have come to the same conclusion. The demise of the odd-lot price differential and commission penalties, there seems to be little reason for splits. It matters very little whether I own 1000 shares at 80 or 2000 shares at 40. At the end of the day, all I really care about is seeing the price go up.
I'd settle for clean restrooms for starters. Televisions are more of an annoyance than a benefit. During busy times (particularly lunch) there has to be some sort of time limit. WiFi would be nice, but it invites customers to linger without buying anything. That becomes problematic. The idea is to increase traffic that spends $$$ rather than sits around taking up valuable space at tables.