The catalyst: The restaurant chain posted weaker than expected results citing higher expenses.
“The fourth quarter was especially challenging given the aggressive competitive promotional environment and very heavy advertising levels,” said Chairman and CEO Sandy Beall.
The trade: Trader Stephen Weiss calls the stock a value trap. “The country doesn’t want expensive burgers, they want cheap burgers sold by McDonald’s,” he says.
The catalyst: The company said quarterly profit fell short of Wall Street expectations as it lost cigarette market share to Altria Group.
The trade: Zach Karabell says the moves should be a lesson to investors who rotate into tobacco makers as a defensive move. “When it misses it goes down too,” he says.
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