Assigment 2
austuoyo08
INVESTMENT2.docxRunning Head: INVESTMENT 1
INVESTMENT 3
Investment Selection
Strayer University
Austin Tuoyo
Introduction
The highest marketable investment is the food industry. It can be a regular food channel or fast food. In this case, I would choose to invest in McDonald. Research shows that if you invested $1,000 in the company ten years ago, then the return will be more than $3,400 today, (Thompson, et al., 2018). The investment would have seen a lifetime return of 300 percent. Mc Donald is located in more than 100 countries and has more than 36900 restaurants, although the company faces a lot of competition.
The company is owned and operated through an affiliate, convectional franchise and developmental license. The restaurant offers a uniform menu. However, since the company is located in different countries, the menu should suit the taste and preference of the customers. Mc Donald’s menu includes hamburgers, chicken sandwich, Filet-O-Fish and other beverages. It also offers a limited or full breakfast menu, (McDonald, 2017). Quality and nutrition are the most critical factors to the customer; therefore, the menu keeps changing to meet the needs of the customer. The company is publicly known. Public relation, promotion and marketing activities are designed to differentiate the brand from its competitors. Promotion, as well as marketing activities, focus on quality, value, food taste, nutrition, menu, customer experience and convenience. The company competes with regional, local national and international food products. In 2018 the number of customers was approximated to be 210000.
Financial performance
In 2018 the sales increased by 4.5 percent. The guest count also increased by 0.2 percent. The increase is sale was due to the shift in product mix as well as the rise in price in the menu, (Lam & Qiu Zhang, 2017). In Japan and other regions, the revenue decreased by 8 percent due to the strategic refranchising initiative. In 2017 the sales increased, especially in Hong Kong and China. The operating income increased by 2 percent. Operating margin improved from 41.9 percent in 2017 to 42 percent in 2018. Earnings per share of $7.54, improved by 18 percent. The sales in 2018 were $ 10,000, in 2017 the sale was $12000 in 2016 the sales were $15000. Moreover, the company’s revenue has also increased from 2016. In 2016 the revenue was $9,000, in 2017 it was $ 10,000, and in 2018 it was $11000.
Market index
The trading right is gradually rising. The stock has increased beyond the 5% chase zone. The stock has formed a three weeks’ tight pattern. This has offered investors a chance to increase their share, (Krueger, 2015). The relative strength line which shows how the stock performs and the S&P 500 index has increased. Investors should aim at buying the stock right now. The company’s stock has 78IBD composite rating out of 99. The rating combines several fundamental and technical factors.
Conclusion
McDonald is one of the oldest fast-food companies. Its suppliers and franchisees are critical to the success of the company. Investors should invest in the company due to their financial performance and strategies. In 2018 the net income increased by 14 percent and earnings per share increased by 18 percent, (Gilbert, et al., 2016). The company is also investing heavily in technology. The company plans at implementing the dynamic yield decision-making technology at the drive-thru. This makes the company one of the very few restaurants using machine learning to encourage its customers or consumers to spend more. This technology could also be part of its mobile app.
Reference
Krueger, A. B. (2015). Ownership, agency, and wages: An examination of franchising in the fast food industry. The Quarterly Journal of Economics, 106(1), 75-101.
Thompson, A. J., Banwell, B. L., Barkhof, F., Carroll, W. M., Coetzee, T., Comi, G., ... & Fujihara, K. (2018). Diagnosis of multiple sclerosis: 2017 revisions of the McDonald criteria. The Lancet Neurology, 17(2), 162-173.
