We recently compiled a list of the Jim Cramer’s Latest Game Plan: 20 Stocks to Watch. In this article, we are going to take a look at where McDonald’s Corporation (NYSE:MCD) stands against the other stocks featured in Jim Cramer’s latest game plan.
Jim Cramer, the host of Mad Money, recently advised investors to maintain composure as major companies release their earnings this week. Additionally, he highlighted the significance of the upcoming nonfarm payroll report, set to be released on Friday, which he believes will have considerable implications for interest rates.
He said that weak hiring figures could prompt the Federal Reserve to continue cutting rates. Last Friday, Cramer noted a mixed performance in the markets: the Dow dropped by 260 points, the S&P fell slightly by 0.03%, while the Nasdaq managed a gain of 0.56%. Cramer characterized the current market conditions as a preparatory phase for an eventful week ahead, urging viewers to pay close attention.
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Cramer emphasized the importance of the employment data released on the first Friday of the month, particularly in light of the forthcoming Fed meeting.
“Speaking of employment, on the first Friday of the month, we get the nonfarm payroll report. I can’t stress how important this number is. We have an upcoming Fed meeting and we’re now seeing [that] cyclicals really missed their numbers because of higher interest rates. A lot of them are rolling over. But if employment stays as strong as it’s been, then we’re going to hear that there will be no November rate cut.”
Throughout his commentary, Cramer conveyed a clear message: while it may be tempting to sell, this period aligns with a cycle of Fed rate cuts, suggesting that buying could be the more prudent strategy. He reminded viewers that this week feels charged with significance, likening it to a playoff atmosphere where the stakes are exceptionally high.
In his concluding remarks, Cramer said:
“Bottom line, huge week, huge opportunity. Just please remember, the first move’s been the wrong move, I’d say probably maybe, almost half the time since this earnings season began. Wait to process the numbers, listen to the conference call before you pull the trigger.”
Our Methodology
For this article, we compiled a list of 20 stocks that were discussed by Jim Cramer during his episode of Mad Money on October 25. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A cook in a busy kitchen assembling cheeseburgers for orders.
McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 67
Cramer discussed the increasing E.Coli cases and any possible effects on McDonald’s Corporation (NYSE:MCD). Here’s what he had to say:
“Tuesday: We’re going to hear from McDonald’s. Now, listen to this, we’re probably going to get a full airing of the E. coli situation, which has taken a turn for the worse. CDC is saying the outbreak has grown, there are 26 new cases. It’s too soon to tell how much damage’s being done to the brand of McDonald’s. Now look, I think there’ll be a short-term overhang. But remember, McDonald’s has been on fire ever since they announced that $5 meal deal when a lot of customers really got more excited. Wall Street can’t stay away from the stock. We’ll know whether there’s going to be a moth to the flame situation or whether it’s just going to be solid for the rest of the year.”
McDonald’s (NYSE:MCD) is a globally recognized brand that operates and franchises restaurants, providing a wide range of food and beverages. The company employs various operational structures, including conventional franchises, developmental licenses, and affiliates, allowing it to maintain a significant presence. Recently, the company faced a challenging situation when an E. coli outbreak linked to its Quarter Pounder burgers raised concerns among investors.
Reports from the Centers for Disease Control and Prevention (CDC) indicated that at least 49 individuals fell ill across ten states, prompting a swift sell-off of its stock as anxiety over the brand’s safety grew. Fortunately, after conducting thorough testing, the company was able to confirm that its beef patties were not the source of the E. coli outbreak.
On October 22, Barclays raised the price target on McDonald’s (NYSE:MCD) to $325 from $300 and maintained an Overweight rating, as part of a Q3 earnings preview for the restaurant group. According to the firm, while comparable sales initially eased at the beginning of the third quarter, they later stabilized at lower levels.
Despite vulnerabilities posed by lower-income consumers, quick-service restaurants have effectively responded to market conditions. Furthermore, the easing of inflation and pricing pressures has contributed to a more favorable outlook for the industry.
Overall MCD ranks 14th on the list of stocks featured in Jim Cramer’s latest game plan. While we acknowledge the potential of MCD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MCD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.