McDonald’s Corporation (MCD), Constellation Brands, Inc. (STZ): WCG Management Still Likes Consumer Stocks

Moving on to WCG Management’s second top pick, McDonald’s Corporation (NYSE:MCD). The fund had initiated a stake in the company during the first-quarter and acquired an additional 1% during the April-June period. As of June 30, WCG Management owns over 250,800 shares of McDonald’s Corporation (NYSE:MCD) worth $23.85 million. On July 23, the fast food giant reported its second-quarter earnings. Although EPS of $1.26 on revenue of $6.50 billion came above analysts’ consensus estimate, a decline of 0.7% in worldwide same-store sales was above the 0.6% decline that analysts anticipated. The worst numbers for the company came from the Asian region, where comparable store sales declined by 4.5% and operating income went down 26 percent. After cracking down below $95 in early January, McDonald’s Corporation (NYSE:MCD)’s stock has mostly remained in the $95-$100 range throughout 2015. With sales declining quarter after quarter, the company is working out on several different strategies to combat that including all-day breakfast which it will launch in its U.S. stores by the end of this year. There also have been recent rumors that with the performance failing to improve, the company might be seriously considering spinning off its real estate holdings into a real estate investment trust. Among the hedge funds we track, Mason Hawkins‘ Southeastern Asset Management held the largest stake of over 18.8 million shares of McDonald’s Corporation (NYSE:MCD) at the end of March.

WCG Management also increased its stake in Constellation Brands, Inc. (NYSE:STZ) by 20% on the quarter to some 179,600 shares worth $19.088 million. A month ago, the company reported its first-quarter earnings with EPS of $1.26 for significantly above the $1.07 EPS reported for the same quarter last year, while revenue of $1.63 billion was up by 6.9% year-over-year. On July 24, the company announced that the size of its board would be increased to 10 members from 9 members would include Daniel J. McCarthy, President and Chief Executive Officer of Frontier Communications Corp (NASDAQ:FTR). Michael Lowenstein’s Kensico Capital and Boykin Curry’s Eagle Capital Management both reduced their stakes in the company by 3% during the January-March quarter.

Disclosure: None