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December 10, 2014


ATTENTION Advanced Investors and Finance Professionals:
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VALUATION WATCH: Overvalued stocks now make up 55.81% of our stocks assigned a valuation and 18.82% of those equities are calculated to be overvalued by 20% or more.  Eleven sectors are calculated to be overvalued--with two at or near double digits.

Bad Ronald

--McDonald's Announces More Changes in an Effort To Bolster Business

McDonald's Corporation (MCD) develops, operates, franchises and services a worldwide system of restaurants that prepare, assemble, package and sell a limited menu of value-priced foods. The company operates primarily in the quick-service hamburger restaurant business. All restaurants are operated by the company or, under the terms of franchise arrangements, by franchisees who are independent third parties, or by affiliates operating under joint-venture agreements between the company and local business people.

Today's Wall Street Journal details additional steps the fast food giant is taking in an effort shore up its flagging US business. The company plans to cut back its menu, review cooking methods, and take steps to increase the quality of its food. The company is scrambling to shore up business after reporting the worst slump in same-store sales in 14 years. Consumers have rejected food from McDonald's as newer/healthier options--like Chipotle--have appeared in the market. Social media memes, such as the famous pictures depicting common McDonald's menu items which do not appear to significantly degrade over time--even up to a year's time--have also hurt the company's image.


Images like this one have NOT helped McDonald's efforts to convice comsumers their food is healthy!

ValuEngine continues its HOLD recommendation on MCDONALDS CORP for 2014-12-09. Based on the information we have gathered and our resulting research, we feel that MCDONALDS CORP has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Book Market Ratio.

As a bonus to our Newsletter readers,
we are offering a FREE DOWNLOAD of one of our Stock Reports

Read our Complete Detailed Valuation Report on McDonalds HERE.

 

Below is today's data on MCD:


ValuEngine Forecast
 
Target
Price*
Expected
Return
1-Month
91.64 0.31%
3-Month
92.21 0.93%
6-Month
92.47 1.22%
1-Year
94.78 3.74%
2-Year
89.18 -2.39%
3-Year
94.77 3.73%

Valuation & Rankings
Valuation
5.26% undervalued
Valuation Rank(?)
65
1-M Forecast Return
0.31%
1-M Forecast Return Rank
74
12-M Return
-4.55%
Momentum Rank(?)
42
Sharpe Ratio
0.75
Sharpe Ratio Rank(?)
87
5-Y Avg Annual Return
8.51%
5-Y Avg Annual Rtn Rank
65
Volatility
11.42%
Volatility Rank(?)
96
Expected EPS Growth
1.23%
EPS Growth Rank(?)
20
Market Cap (billions)
89.71
Size Rank
100
Trailing P/E Ratio
16.83
Trailing P/E Rank(?)
69
Forward P/E Ratio
16.62
Forward P/E Ratio Rank
46
PEG Ratio
13.70
PEG Ratio Rank
2
Price/Sales
3.21
Price/Sales Rank(?)
30
Market/Book
8.30
Market/Book Rank(?)
15
Beta
0.34
Beta Rank
85
Alpha
-0.05
Alpha Rank
58

Want To Know More About Our ValuEngine View Newsletter?

We still find a positive economic environment for equities within the United States. As we noted a few weeks ago-- when the market was in a sell off mode, most of the doom and gloom seemed to be emanating from political and media sources looking to capitalize on the slight wobble for electoral purposes.

Now, it is worthwhile to note that many of those same "analysts" claim the ongoing rebound is due to the US election results. But we believe that we are seeing not the short-term noise of a mid-term election, but rather the continuation of favorable long-term economic trends within the US that are --finally--being bolstered by an improved employment situation. We hope that nothing from a new GOP-dominated Congress--such as a return to harsh austerity policies favored by the American right wing--will negatively impact the overall upward trajectory of the US economy.

We remind investors once more than mixing politics and investing is a very bad idea. Relying on blatantly political sources for economic analysis and advice is a quick path to a poorly performing portfolio. Whenever you hear an analyst, pundit, or other talking head of any ideological predilection attribute market moves to election results--or the daily ebb and flow of life in Washington DC, it's time to hold on to that wallet/purse.

Consider the market since January 2009--DOW up 105%, SP500 up 129%, NASDAQ up 196%--Anyone who listened to the "BUY GOLD BUY GUNS BUY SEEDS" crowd after the election of 2008 missed out on an epic rally.

In any case, with favorable markets we find that once more our top-performing newsletter portfolio, the ValuEngine View, has bounced back wonderfully and has returned to its winning ways.

Looking for a monthly portfolio of stock picks which are objective and based on cutting-edge academic theory and Wall St.practice? Then subscribe to The ValuEngine View Newsletter.The ValuEngine View Portfolio is based on our highly-refined and tested ValuEngine Portfolio Strategies along with our proprietary quant-based composite scoring system. The ValuEngine View Newsletter is the product of sophisticated stock valuation and forecast models first developed by Yale Professor of Finance Zhiwu Chen.

The ValuEngine View Newsletter is the product of a sophisticated stock valuation model that was first developed by ValuEngine's academic research team. It utilizes a three factor approach: fundamental variables such as a company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's future 12-month EPS, and the 30-year Treasury yield are all used to create a more accurate reflection of a company's fair value. A total of eleven additional firm specific variables are also used. In addition, the portoflio uses top picks from our Forecast Model. In essence, the portfolio is constructed with the best picks from our main propiretary models

Each month you will receive an electronic copy of our newsletter highlighting 15 potential long positions along with five alternate picks. Our investment strategies focus on dozens of fundamental and technical factors for over 8000 individual stocks, synthesize the data, and then come up with a portfolio. Each newsletter portfolio focuses on maximum potential returns so there are no diversity requirements. Each portfolio pick includes critical ValuEngine valuation and forecast data. These 20 total picks represent the most up-to-date equity assessments of our proprietary models.

Please click HERE to subscribe. You may download a sample copy HERE. After your subscription is approved, you will immediately receive access to download the current issue of newsletter as well as the previous issues, which are all available as PDF files. Each month when the latest issue of the newsletter is released, we will send you an email, informing you to download it from the site. The newsletter is released near the middle of each month.

 

  VE View vs. S&P 500 Index Past Five Years
VE View
S&P 500
Ann Return
23.13% 13.25%
Ann Volatility
22.30% 12.20%
Sharpe Ratio
1.04 1.09
Sortino Ratio
1.78 1.39
Max Drawdown
-34.94% -11.14%

  The ValuEngine View Newsletter is derived from the ValuEngine Aggressive and Diversified Growth BenchmarkPortfolio Strategies. These strategies are the product of ValuEngine's academic research team and combine cutting-edge financial analysis and portfolio construction techniques with real-world Wall St. know how. 

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The ValuEngine View Newsletter portfolio has 15 primary stock picks and five alternates and is re-balanced once each month. The ValuEngine View Newsletter is published near the middle of each calendar month. An equal amount of capital is allocated to each stock. The monthly returns are calculated from the closing prices on date of publication. The performance calculation does not include any transaction costs.

 

 

ValuEngine Market Overview

Summary of VE Stock Universe
Stocks Undervalued
44.19%
Stocks Overvalued
55.81%
Stocks Undervalued by 20%
19.66%
Stocks Overvalued by 20%
18.82%

ValuEngine Sector Overview

Sector
Change
MTD
YTD
Valuation
Last 12-MReturn
P/E Ratio
0.43%
-0.85%
-0.87%
15.20% overvalued
7.18%
22.16
0.29%
-0.58%
5.76%
9.43% overvalued
5.57%
23.32
0.33%
-1.12%
-1.30%
8.59% overvalued
-0.16%
27.66
0.18%
-1.80%
-1.64%
8.20% overvalued
-0.51%
26.67
0.79%
1.12%
17.17%
8.17% overvalued
11.97%
29.76
0.48%
-0.08%
6.52%
8.00% overvalued
3.96%
31.15
0.12%
-2.45%
-2.38%
7.35% overvalued
1.43%
16.99
0.29%
-0.04%
4.62%
6.27% overvalued
4.59%
18.04
0.66%
0.10%
7.51%
4.62% overvalued
8.28%
21.41
0.92%
-0.47%
4.32%
3.21% overvalued
2.76%
25.98
-0.23%
-2.78%
9.19%
1.60% overvalued
7.29%
20.41
1.54%
-1.72%
-2.59%
0.23% undervalued
1.00%
16.94
1.07%
0.14%
-0.02%
1.81% undervalued
1.23%
25.30
0.52%
-0.40%
-2.45%
3.47% undervalued
-1.86%
20.42
1.28%
0.01%
-4.53%
13.11% undervalued
-8.41%
23.57
2.11%
-9.00%
-14.72%
23.94% undervalued
-24.30%
19.77

 

 

 

 

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