Wednesday, June 20, 2012

Is McDonald's Stock Now a Buy?

What a difference five months can make. Back in January, McDonald's (NYSE: MCD [1]) was trading at $102, thanks to 2011's strong 34% rally, and more and more investors were excited to step into what looked like a well-established ride up.

Looks can be deceiving...

Not only did the rally not continue, but as of two weeks ago, shares [2] of the world's biggest restaurant chain have actually lost 11% of their January peak, with no apparent floor in sight.

What happened to McDonald's to merit such a reversal of fortune for shareholders? That's just it -- nothing really happened to the company. The stock simply took on a life of its own.

For investors who understand that a stock's price can sometimes disconnect from the company's actual performance, these wild swings can represent outstanding entry and exit opportunities.

In fact, that window of opportunity is open right now. (more)

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