14 Stocks on Jim Cramer’s Radar

1. McDonald’s Corporation (NYSE:MCD)

Number of Hedge Fund Holders: 75

McDonald’s Corporation (NYSE:MCD) is one of the 14 stocks on Jim Cramer’s radar. McDonald’s Corporation (NYSE:MCD) was mentioned during the episode, and here’s what Mad Money’s host had to say:

“It amazes me that analysts refuse to learn from their mistakes that some stocks should not be taken off the buy list. Today, Morgan Stanley downgraded the stock of McDonald’s, saying it’s arguably too expensive and that it will probably not be insulated from some structural pressures on fast food. Now, with the stock at 25 times earnings, consensus estimate’s too high. Morgan Stanley moved [it] to Equal Weight or Hold. [The] stock dropped $2 and 58 cents or 0.84% on that.

Now, it would not have made much of an impact on me if McDonald’s hadn’t also been downgraded by Loop Capital on Friday, again, concerned that it won’t beat the consensus numbers. Look, I understand the downgrades. Stock’s up 5%. It’s holding its own, but I think that in the long run, it has never paid to downgrade Mickey D’s. It’s the king. It offers good value and it’s incredibly well run…

The main thing Loop cites for what they think will be a shortfall is negative reaction to the new chicken strips launch… I say, wait a second, this is McDonald’s. Do you think this company is stupid? Do you think that CEO Chris Kempczinski doesn’t pay attention to these things? Do you think he ignores the franchises? Do you think he doesn’t know the product’s ugly? Do you think that he’ll bet everything on a product that people don’t like?

Listen, McDonald’s is an amazing company. It didn’t become amazing because it stuck with bad ideas… The strength of McDonald’s is that they don’t fight battles they can’t win. When something doesn’t work, they just dump it and they move on. Which is why I say you downgrade a stock like McDonald’s at your own peril.”

McDonald’s (NYSE:MCD) runs and franchises restaurants under its brand. The company serves a range of food and beverages like burgers, chicken sandwiches, fries, desserts, and breakfast items. It uses different franchise models, including conventional agreements, developmental licenses, and affiliate partnerships.

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