Prop Desk: Burger Trade
McDonald’s wants to entice you into its restaurants more frequently. And that means doing something they haven’t done in quite a while.
We’re talking a brand new menu item. But not just any menu item – a juicy, mouth-watering burger – the first burger to be added to the menu since 2001.
According to a report on the Chicago Tribune it will be “made from a higher grade of beef than other McDonald's burgers.” These new Angus burgers weigh approximately 1/3 pound.
Sounds yummy if you’re a beef lover.
But don’t expect to find this new offering on the value menu. “The Angus is the fast-food giant's most expensive U.S. sandwich, priced at about $4,” writes the Tribune.
And that’s an interesting strategy considering McDonald’s is known for its dollar menu and value meals.
But interesting strategies may be called for. Same-store sales in May increased by 2.8% -- far less than the 4.3% increase of one year earlier.
Considering growth is starting to slow at McDonald’s will this new burger give the fast food giant a kick?
The price of the burger could be a mistake, muses Pete Najarian. But McDonald’s has been a winner with their new coffee campaign. And the value menu is working.
It feels to me like they’re forcing this burger, counters Tim Seymour. It’s been in the pipeline for over 2 years. However, I see the stock as a value play.
I think you could own this stock right here, adds Guy Adami. But it’s worth noting that in the past the stock has had trouble at $60.
If you’re looking for a restaurant play, I’d look at Brinker , counsels Joe Terranova.
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Trader disclosure: On July 1st, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AA), (AAPL), (BAC), (BX), (F), (NUE), (EEM); Seymour's Firm Owns (FCX), (YHOO); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU; Terranova Owns (XBI), (ABT), (MSFT), (UUP), (RIMM; Najarian Owns (F) Call Spread; Najarian Owns (GS) Call Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (JPM) & Short (JPM) Calls; Najarian Owns (PALM) call Spread; Najarian Owns (YHOO) Call Spread; Najarian Owns (ELN) Calls