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business newsTicker Shock: Four Reasons to Buy a McDonald's Dip
Thursday's top stories and stocks with potential to move.
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Asian stocks rose overnight. The Hang Seng was up 2.96%, and the Nikkei rose 0.72%. European stocks however were in negative territory earlier this morning. And here in the US, we’re currently trading higher.
Here’s what I’m tuned into this morning:
McDonald's (MCD)
Will Ronald get cooked with these results?
Mickey D’s put up a second-quarter profit of $0.97, excluding items, which seemed to be in line with expectations. However, its top line looked a little on the light side. In short, this may not be the ball pit to play in during early trading.
My thoughts:
1. The results are certainly a bit of a disappointment because the company has been doing so darn well quarter after quarter (beating expectations). But does this mean that Ronald’s reign is finished? Hardly.
2. Of all the fast-food restaurants out there, McDonald's is still very much where I’d want to be. Global comps were up a healthy 4.8%, and comps were up in the US, too.
And even though the economy is in recovery, don’t think that families are suddenly throwing all caution to the wind. No way -- that dollar menu, and its coffees, are going to be bringing people in the door like moths to the light on my front porch in the summertime.
3. Hey, I don’t wanna let that insider purchase back in May slip my mind. That looked kinda tasty, if you know what I’m saying.
4. I’d look at any weakness in the price as opportunity.
Qualcomm (QCOM)
It was hardly a bang-up third quarter for Qualcomm. However, excluding items, earnings came in at $0.54, which was north of the $0.52 analysts had been looking for. It also beat on the revenue line as well.
The glitch seemed to come from the fourth-quarter revenue guidance. In the release the outlook it offered for the period on the top line was $2.55 to $2.75 billion, which probably isn’t going to knock the socks off a lot of people give the estimate is $2.71 billion.
Two quick thoughts:
1. If it looks like it’s ultimately going to hit that 2010 estimate of $2.40, the shares could have some nice upside. But that’s kind of a big if, as far as I’m concerned. 2. As far as what the next big catalyst could be I’m not too sure. I guess some good visibility into 2010 would be nice. By the way, if it is able to get a little wind at its back and punch through that 52-week high, I think it’d draw a lot of eyeballs and the stock could be off to the races.
For my last take on QCOM, click here.
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