Yesterday, on my way to work, I dropped by one of nearby McCafes, and ordered one of those latte coffees everybody is talking about. I actually never went to McCafe before, so I was very curious about the taste of their new coffee. And I was very pleased, really. It costs less than Starbucks, which is somewhat expensive, if you ask me.

The whole event inspired me to take a closer look to the story behind the curtains and new McDonald’s development strategy.
There was an upscale sale of coffee products during the August, which were probably the inducement for September’s raise in the price of shares (MCD). MCD was pushed up for 3.2% on September 11, and reached $51.76, with new 52-week high of $53.55 during trading session.

I also noticed another thing: there was a huge raise in regular coffee sales through August, as far as 19%, and even bigger raise in the total sales of coffee (including coffee specialties, like lattes and cappuccinos) which peaked to 37% in July. Do you see any connection with McDonald’s introduction of its premium drip coffee last year?

As I see it, a great potential for McDonald’s is just to be widely uncovered in this niche. Of 21 McCafe in the United States, 10 were opened this year. There was an S&P’s research note, which said that further growth is to be expected, especially in Europe where it could reach even 15%, or slightly more than 10% in Asia-Pacific-Middle-East-Africa region.

Some restaurant industry analysts think that many people are switching from dining rooms, that are more expensive, to fast-food restaurants with good service and price policy, which, even if it is just a trend continuation, could be one more positive feedback for McDonald’s shares.

Considering that European McCafes are in their second year of expansion, there will definitely be another profit increase.
By connecting all the dots in the chain of events within McDonald’s business strategy, earnings are expected to raise, profits also, and therefore it seems like a good investing opportunity, even for risk-averse investors.

Definitely take a deeper look at McDonald’s as a possible investment opportunity this year. November through April is usually when stocks perform the best.

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