Everybody must eat, every day. Moreover some basic thoughts about the food industry. When the economy of the emerging countries goes better, people start eating meat and usually tend to adopt the lifestyle of the US. When the economy of rich countries goes sour, people leave fancy restaurants and go to more simple places.
So it seems that a good company to invest in should be someone selling a food, like a restaurant chain. This restaurant chain should sell a lot of meat, and it should be very Western like-kind of cuisine. It should be global so that it can get growth from many different parts of the world. But in the US it should be selling food a low prices so that people should want to eat there instead of expensive restaurant chains as the economic times are tougher for the middle class.
Does such a company exist? Of course, it’s Mac Donald’s!
So the next question: is it a good investment? Well we think that this company is a great long-term growth investment as it has constantly beaten both the S&P500 and the Dow Jones during the last 10 years. And this company has a great future, since it is global enough to grow and open new restaurants wherever in the world the economy is booming and since in the Western world, and especially in the US, it remains one of the few restaurant chains that did not go down in turnover in spike of the recent credit crisis. A great business model !
Look at this growth to be convinced (you can click on the picture to be redirected to Google Finance, the source of this graph):