Dow Review: McDonald's

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The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

Over the next couple of weeks, John and David will be revisiting some calls they made on individual stocks of the Dow. Today, they're talking McDonald's. This company is down around 8% so far in 2012 compared with just a 5% or so gain for the Dow average as a whole. McDonald's has been a Dow leader over the past few years, so this is a disappointing result. John and David thought that McDonald's would outperform, so this result is surprising to them. The biggest risk facing the company, of course, was a slowdown and that appears to be the culprit here. Same-store sales are still growing, but they aren't growing as fast. McDonald's will have to keep adjusting its menu to keep moving forward. There's plenty of heat from competitors like Chipotle, YUM!Brands, and Panera. It looks as though some economic weakness is on the way. Over the long term, John and David still think this stock will beat the market.

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The article Dow Review: McDonald's originally appeared on Fool.com.

David Meierhas no positions in the stocks mentioned above.John Reevesowns shares of Chipotle Mexican Grill. The Motley Fool owns shares of Chipotle Mexican Grill, McDonald's, and Panera Bread.Motley Fool newsletter services recommendChipotle Mexican Grill, McDonald's, Panera Bread, and Yum! Brands. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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