Lowering Strike Buy Price on MCD to $77.50

A One Year Chart of MCDonald's (NYSE:MCD)

I currently have an Open Buy 100 shares MCD ‘Mcdonalds Corp Com Limit $75.00, but the stock is not coming down fast enough to get it before November 29th the x-divident date. It doesn’t look like MCD will fall below $75 anytime soon as it has bounced off the $78 level two time in the last month. I like the McDonald’s story. Great international exposure, especially in China. Looking for a pullback to get in. This will be my first purchase of MCD. The x-Divident date is November 29 and the current yield is 3.15%

Three Month Chart of MCD
McRib Sandwich

Since this is a long term income buy with strong growth potential, I am going to take a bite and lower my strike price to $77.50 per share, in effect after today’s market close during aftermarket hours.

Additionally, the Street has an A+ rating on this stock, which is its highest rating. We rate MCDONALD’S CORP (MCD) a BUY. This is based on the convergence of positive investmentmeasures, which should help this stock outperform the majority of stocks that we rate. The company’sstrengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth inearnings per share, notable return on equity and expanding profit margins. Although the company mayharbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. – the Street

Latest on MCD, they do have some pricing power in China. From Reuters, “McDonald’s has raised menu prices in mainland China by 0.5 yuan to 1 yuan per item with immediate effect because of rising materials costs as the country.”

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October 8 Order Status

Open Sell 1/4 ‘POT 98
Open Buy 1/4 ‘FFBC 8
Open Buy 1/4 ‘KR 20
Open Sell 1/8 ‘TRAD 10
Open Buy 1/4 ‘MCD 49.5
Open Buy 100 ‘WMT 45.72

When I refer to 1/4 or 1/2 I am saying that I have a total target for the purchase of a security. I divide the total target into quarters. When I make a move on a stock, I try to move in 1/4 increments.

Order Status 9-16-09

Wed Sep 16 2009 9:23:06 AM EDT
Status Action Quantity Symbol Type Price Entered Date
Open Buy 25% ‘KR Limit 20 9/16/2009
Open Sell 25% ‘POT Limit 97.3 8/31/2009
Open Buy 25% ‘BAC Limit 15 8/5/2009
Open Sell 25% ‘TRAD Limit 10 7/23/2009
Open Buy 25% ‘MCD Limit 49.5 7/23/2009
Open Buy 25% ‘WMT Limit 45.7 7/10/2009
Open Buy 25% ‘TBT Limit 45 7/9/2009
What does 25% Mean?When I refer to 25% I am saying that I have a total target for the purchase of a security. I divide the total target into quarters. When I make a move on a stock, I try to move in 25% increments.

Buy 1/4 MCD at $50

McDonald’s stock is bouncing from 45-67. Its right in the middle at 58.82 at close yesterday and it looks to open below 57 today.

I would not consider this a buy candidate until it gets to $50 or below and it probably won’t get there for a long time. Dividend yield is 3.4% at current price. The dividend looks good.  I see a short term downside an opportunity to buy 1/4 of my portfolio goal for MCD. If you can get it at $50, it would be a good income stock with excellent growth potential. Not sure if we will get any of this stock at $50.