Mad Mail: What Happened to McDonald's?
Jim: I just want to clarify some background on Wabtec, which you mentioned on your show Friday. Formally know as the Westinghouse Air Brake Technologies, Wabtec was spun off from American Standard around 1990. It’s a different company than WABCO which was spun off from American Standards (now Trane ) in 2007 --Skip Colcord, Director of Global Media Relations for Trane
Cramer says: I mixed them up. I like WABCO, the recent spin-off. The old WAB is a train braking business, which also happens to be good.
Dear Jim: A “Florham Park, I ate at Root's Steakhouse this weekend” Boo-yah Jim! Help me understand what happened with McDonald’s. They had a wonderful quarter and beat earnings estimates by two cents. They also indicated that they are profiting from the weak economy by attracting customers to their lower prices and expanded value menu. Their same-store sales jumped 6.7% as a result. Why then did their stock trade down? Seems like an irrational market to me. Help me understand this madness!!! In a time of chaos, I look to you for your all-knowing guidance.
Cramer says: There were rumors last month that McDonald’s domestic business would be flat. That sent the stock down 10 points.. Sure enough, the rumors turned out right on Monday, and MCD sunk further. I used this as a buying opportunity for my charitable trust because the domestic business decline was already priced in. MCD is a “major buy” here.
Cramer says: [Diana Shipping CEO] Simeon Palios gave me a chill in its bearishness on the shipping sector, that’s when I went negative on the group. “I never mess with CEOs that tell me I am too optimistic.”
Jim's charitable trust owns McDonald's.
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