While McDonald’s posted gains of more than 40% in 2011, its performance has been lackluster in 2012 so far. The stock has lost close to 5% in 2012 compared to the S&P 500 index, which has gained more than 10%. The news that CEO Jim Skinner will end his tenure in June 2012 has also created some uncertainty about the company’s future. However, given the company’s strong fundamentals, we believe the stock has a good case for at least for some modest upside. McDonald’s competes with Yum! Brands, Subway, Starbucks, Wendy’s, Chipotle Mexican Grill, among many others.

1) Strong Business Model
McDonald’s restaurants worldwide are either franchised or company-operated. More than 80% of the 33,000 restaurants worldwide are franchised… read full post.