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Celsius Stock: Is It a Buy, Sell, or Hold Near All-Time High?

Celsius Holdings, Inc. (CELH) combines nutritional science with mainstream beverages to develop, process, market, distribute, and sell functional drinks and liquid supplements to a more diverse segment of consumers that has remained unserved by legacy energy drinks. The company’s core offerings include pre- and post-workout functional energy drinks, including its flagship brand CELSIUS, a calorie-burning

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MCD vs QSR: Which Is Healthier For Your Portfolio?

While the S&P-500 (SPY) and Nasdaq Composite (COMP) are on track for a significant losses this year, the Restaurant Sector has put together a solid performance, on track for just a 9% loss or an 1100 basis point outperformance vs. SPY.
This is despite starting off the year with a much worse performance, with the index briefly down 25% as of May, despite it trailing the S&P-500 and Nasdaq at the time.
The strong recovery in the sector can be attributed to the fact that inflation looks to have peaked, which is a huge benefit to restaurant margins.
Plus, valuations were already at their most attractive levels since March 2020 as of early 2022, with the index starting its bear market six months before the S&P 500 in July 2021.
Finally, while not all restaurant names are considered defensive, quite a few are lower-beta, pay attractive yields, and some benefit from a recessionary environment as they become trade-down beneficiaries.

In this update, we’ll look at two of the largest names in the sector and which looks like the better buy after this violent market-wide correction.
McDonald’s (MCD) and Burger King (QSR) have gone head to head for years from a competition standpoint regarding burger wars.
While McDonald’s has more than twice the number of restaurants globally and started out a decade earlier with Burger King being the copycat, there’s no clear consensus on the better restaurant operator among the two.
From strictly a same-store sales or wallet share standpoint in the United States, McDonald’s has been the undisputed leader, and Burger King has lagged over the past couple of years.
However, with similar prices, similar menus, and Burger King’s appearing to have more iconic fries while McDonald’s wins on burgers, it’s difficult to crown a leader.
That said, there are significant differences when it comes to investing in the brands, especially given that Burger King is just one piece of Restaurant Brands International’s portfolio, which also consists of Popeyes’s Louisiana Chicken, Tim Hortons, and the newly added Firehouse Subs.
In this article, we won’t try to answer the near-impossible question of which is the better burger chain, but we’ll highlight which stock looks healthier for one’s portfolio.
Business Model
Outside of the obvious difference that Restaurant Brands International has four brands, and McDonald’s has just one brand, Restaurant Brands and McDonald’s have very similar business models. This is because both companies are restaurant franchisors with over 30,000 restaurants globally, and more than 90% of their restaurants are franchised.
That said, Restaurant Brands takes the edge slightly, with 99% of its restaurant base franchised vs. 95% for McDonald’s, making it slightly more inflation-resistant.
However, from a simplicity standpoint, one brand is better than four, given that excelling at one thing is always easier than excelling at four.
This is true even if Restaurant Brands has done a phenomenal with the three new additions to its portfolio: Tim Hortons (which is flourishing in China) Popeyes (which is just beginning its international expansion), and Firehouse Subs (which was ranked #1 for food quality across the sandwich QSR category in 2021, and #1 for “Food Taste & Flavor” by the Technomic Sandwich segment).
Still, McDonald’s has executed flawlessly with one brand and is a consistent marketing leader, giving it a slight edge from a simplicity standpoint.
Restaurant Brands – 1 / McDonald’s – 1
Unit Growth
Regarding unit growth, Restaurant Brands has four brands with ~30,000 restaurants globally, while McDonald’s has one with ~40,000 restaurants, making it much more saturated than its coffee, chicken, sandwich, and burger peer.
Given that Restaurant Brands has more whitespace and younger brands which are still in the earlier innings of their growth stage, the company benefits from much higher growth. In fact, it hopes to grow to 40,000+ restaurants by 2028. Besides, this was before it acquired Firehouse Subs which immediately added 1300 restaurants.
In McDonald’s case, the company will be lucky to hit 50,000 restaurants by 2028, giving it a low single-digit unit growth rate vs. Restaurant Brands with mid-single-digit growth.
So, on a like-for-like basis, Restaurant Brands wins on growth.
Some investors might argue that McDonald’s continues to gnaw away at its competitor’s same-store sales and gain market share, and when combined with same-store sales and unit growth, McDonald’s is actually higher growth than it looks on the surface.
Although a fair point, Restaurant Brands has unleashed a Reclaim The Flame Plan at Burger King, planning to invest $150MM in digital and advertising and $250MM towards restaurant tech, kitchen equipment, building enhancements, and remodels.
This could allow Burger King to claw back any market share losses that McDonald’s has gained post-pandemic. Hence, I think Restaurant Brands has the edge with higher unit growth and its lagging brand (Burger King) getting a refresh to help with a slower-than-planned turnaround.
Restaurant Brands – 2 / McDonald’s – 1
Positioning In The Current Environment
Moving to each company’s position in the current environment, Tim Hortons is a juggernaut with over 75% of the market share for coffee in Canada and while giving up burgers and fries might not be easy, giving up caffeine and sweets is even more difficult for most consumers.
So, in terms of Tim Hortons and McDonald’s alone, Tim Hortons wins.
However, Tim Hortons is just one piece of Restaurant Brands’ portfolio, and on average, McDonald’s is lower priced and more of a value than Burger King, Popeyes, and Firehouse Subs, with the latter being considered a premium option to Subway.
With consumers pulling back and looking to treat themselves at the lowest-cost possible, McDonald’s stands head and shoulders above its peers.
Not only does it have more locations (higher density and more golden arches) to lure consumers in, but it also has exceptional marketing and the best prices, hands down.
This makes dining out guilt-free with a nearly unnoticeable hit to one’s wallet.
This is a huge advantage when consumers are looking for every reason not to spend with personal savings rates at their lowest levels in nearly decades.
So, while Restaurant Brands is certainly positioned very well as a trade-down beneficiary, it doesn’t quite have McDonald’s positioning, and McDonald’s takes the edge in this category.
Restaurant Brands – 2 / McDonald’s – 2
Valuation
Finally, when it comes to valuation, there is one undisputed leader, and it isn’t even close.
In fact, MCD currently trades at ~25.7x FY2023 earnings and ~23.6 FY2024 earnings, while QSR trades at ~21.3x FY2023 earnings and ~19.2x FY2024 earnings.
This is a massive difference, with investors paying more than four turns more for McDonald’s than Restaurant Brands on FY2024 earnings and an even higher multiple in FY2025, considering that QSR will continue to lead from a growth standpoint.
While this discount might have made sense before the appointment of Patrick Doyle as Chair, it makes little sense following the appointment, with QSR now having a sector giant at its helm, a company that delivered 1000%+ returns at Dominos, making it the top performing stock from 2010-2020.

Meanwhile, from a yield standpoint, investors are picking up an extra 1.1% yield per annum with QSR, with a 3.4% dividend yield vs. 2.3% for MCD.
However, with QSR having a very low payout ratio, especially with the addition of Firehouse Subs and a higher growth rate, I would expect a further rise in QSR’s dividend next year to push this yield closer to 3.8%.
Hence, not only does QSR trade at a deeper discount to fair value (24x FY2023 EPS estimates = $73.20 fair value), but it pays investors more to wait for this turnaround.
I see QSR as the clear leader on valuation, and with better growth at a more reasonable, I see QSR as the Winner between the two stocks.
Restaurant Brands – 3 / McDonald’s – 2
Final Verdict
To summarize, for investors looking for safety, an attractive yield, and a solid growth story at a turnaround-like valuation, I see QSR as the more attractive option, and I would view any pullbacks below $60.00 as buying opportunities.
Disclosure: I am long QSR
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing.

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3 Retail Stocks You’ll Be Glad You Bought Before 2023

Despite the recessionary pressures, holiday spending remained robust. According to the Mastercard Spending Pulse, retail sales in the United States increased 7.6% year-over-year from November 1 to December 24. In addition, the 10.6% annual growth in online sales and e-commerce, accounting for 21.6% of all retail sales (up from 20.9% in 2021), indicates that customers

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My Latest “Prediction” For 2023

Back in March I posited the notion that the S&P 500 would need to fall to about 2,900 before all of the froth that the Federal Reserve had injected into the market through its various monetary stimulus programs dating back to the Great Recession had finally burned off.
On Christmas Eve the S&P closed at 3844, which would put it 19% below its all-time high of 4,766 on December 27, 2021, or about a year to the day.
In recent days some market prognosticators have been warning that the market is poised to fall another 20%, which would put the index at about 3,000, or slightly above my guesstimate.
So do I feel vindicated, if that is the right word? No, and I hope I’m wrong anyway.

First, my guess was not a prediction, just a quick back-of-the-envelope calculation based on my assumption that the Fed was responsible for about half of the stock market’s 600% gain between the March 2009 bottom of 683 and the time I made my comment.
So, if we cut that 600% gain in half, that would reduce the S&P’s gain to a still respectable 300%, or a little below 3,000.
Not an educated estimate, maybe, but I thought a reasonable guess—a worst case scenario, if you will.
Second, we don’t know if these bears will turn out to be right. I hope they’ll be wrong.
I now believe the Fed won’t have to drive the economy into the tank in order to get inflation down to where it wants it to be, probably in the 2.5% to 3% range.
Remember, about two years, in what was considered to be a major policy shift, the Fed said it was willing to let inflation “overshoot” its long-term target of 2% for a time, as it indeed it did.
Now it looks like inflation is dropping a lot faster than most people thought, and the Fed itself is now forecasting that inflation will fall to 3.1% next year before declining in 2024 to 2.5% and 2.1% in 2025, i.e., putting it at its long-term target.
That, to me, is a reason to be positive about the market and the economy. Inflation is, in fact, coming down, and fairly quickly.
Of course, my March “forecast” didn’t assume that the solons at the Fed would see it that way. As we know, the Fed is often wrong, by wide margins and in terms of timing. Which is one big reason why the market has shown a predilection in the past few months to not believing the Fed when it makes a statement about monetary policy and inflation.
Why should it? We’ve been told countless times to “don’t bet against the Fed” or “follow the Fed,” even when our gut tells us it’s all wet.
So my latest “prediction” is that we are a lot closer to the bottom in stocks now than another 20% drop would warrant, and that 2023 could be a good year for the market.
As I noted in my previous column, there are many reasons to be optimistic about inflation. As the Wall Street Journal reported last week, “The Covid-19 pandemic might not be gone, but the global supply-chain crisis it spawned has abated. Goods are moving around the world again and reaching companies and consumers… Gone are the weekslong backlogs of cargo ships at large ports. Ocean shipping rates have plunged below prepandemic levels.”
“Chip inventories swell as consumers buy fewer gadgets,” another Journal article proclaims. “Semiconductor companies slash production plans amid weak demand. The world is now awash in chips.”
The Fed has already raised interest rates close to what it says will be their end point. Gasoline prices have plunged despite the ongoing war in Europe. Used car prices have declined. Home sales have plummeted. Rental prices have dropped, to the point where builders are holding back on adding more supply.

The main reason why inflation held so low and for so long—technological developments that increased productivity and competition—continue to benefit us.
The only institution that has not gotten the disinflationary message is the U.S. government, which continues to spend as if we are in constant crisis mode. Witness the recent passage of the $1.65 trillion omnibus bill, which apparently few people in Congress actually read even as they passed it, and President Biden will no doubt be happy to sign.
Can we expect any fiscal restraint when the Republicans take over the House next month? Probably not, but at least gridlock may constrain reckless fiscal spending at least a little bit.
Conclusion: The Fed’s job is almost done, barring some new unforeseen crisis. That should give us some optimism for 2023.
George YacikINO.com Contributor
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

My Latest “Prediction” For 2023 Read More »

1 Stock That Stands to Benefit From a Potential Chinese Stimulus

Despite concerns regarding the macroeconomic impact of interest rate hikes by the Federal Reserve and other major central banks, prices of iron ore and other minerals have recovered recently. The key driver behind the recovery is the softening stance of the Chinese leadership on its Covid restrictions in the wake of the collateral damage to

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The Only Four Strategies That Worked in 2022 – and Will Work in 2023

New Year is in just a couple days. We spent Christmas in my house noisily with one of my two granddaughters in attendance, with a prime rib roasting away. As is tradition, my wife had the TV tuned to a station that plays seasonal tones while the screen is filled with a roaring fireplace.

Now we’re heading to Orlando to my son and his wife’s house for Christmas part two, with our youngest granddaughter. To keep our New Year’s tradition alive, we will swap the prime rib for a pork roast and black-eyed peas.

As we ring in 2023, many investors will feel thankful that 2022 is over. Unfortunately, this year has not been much fun for traditional investors.

For less conventional investors, things looked much better…

If you bought into the Wall Street story and used low-cost indexes, or if you formed your portfolio along the suggested 60% stocks and 40% bond allocation, you have gotten waxed.

What worked in 2022 was unconventional thinking:

Those who invested in heavily discounted closed-end funds that own a lot of energy-related assets have done well in 2022.

Buying high-yielding bank stocks during market sell-offs has worked out OK as well.

Ignoring electric vehicles and renewable energy and buying fossil fuel-related stocks has turned out to be a brilliant strategy.

Heeding the late, great Marty Zweig’s old Wall Street adage, choosing not to fight the Fed was just as reliable a piece of advice this year as it always has been.

Buying stocks that trade below liquidation value has always been a winning strategy and is again this year. If you followed this approach, there would have been no wonderful, world-changing technology stories to tell around the water cooler about your 2022 portfolio.

Instead, you would have owned some incredibly boring companies that made hand tools, automobile locks, built ships, canned vegetables, and other mundane businesses.

And you would have had gains of more than 20% for the year.

If you followed Wall Street’s advice, you would have had close to 20% losses this year.

It would have been worse if you followed the growth stock gurus like Cathie Woods at Ark Funds. Her flagship Ark Innovation ETF (ARKK) has a portfolio filled with all the exciting companies that are supposed to be changing the world.

But investing in these stocks is not just about owning the companies that are changing the world: it’s about how they make or lose you money. Your investment portfolio can change your net worth and scheduled retirement date, and investors who owned ARKK this year and bought into the rebound story are down more than 60%.

It’s unlikely to get better. If you think that once inflation is under control, things are going right back to the way they have been the last decade, you are sadly mistaken.

The near-zero interest rates, tightly controlled by monetary policy, that we had for more than a decade are over. The markets will play a much more significant role in setting rates now.

The environment for stocks will be much less favorable. After a decade of above-average returns, we are in for a decade of below-average returns.

The good folks at GMO have forecast negative returns on domestic stocks and bonds for the next ten years or more. And Vanguard is looking for U.S. stock market returns of just 2.3%–4.3% annualized for the next decade.

If you do what everyone else is doing in the financial markets, you are probably about to have a very uncomfortable decade. Even the best-case scenario is that conventional approaches to investing will not provide the returns you need to live the life you have been hoping to achieve.

But there are strategies that have provided market-beating returns regardless of economic and market conditions.

They are not conventional. Most of the time, they are not even exciting. Most of them involve minimal trading, so there is no action to be found with these strategies.

But there are profits.

Chasing exciting dreams has never led to a happy ending in the stock market. Every time we get one of these world-changing stories, we have seen very fast large gains in the markets, followed by an epic collapse.

Everyone believes they are smart enough and quick enough to get out before the collapse. Most of us are not.

The world is changing in many exciting ways over the next few decades. Picking the winning companies in all the risky research and development efforts needed for those changes to occur is a crapshoot at best.

During the California gold rush in the 1840s, some prospectors and miners got rich. But everyone who sold supplies, blue jeans, picks, and shovels made a fortune.

The same approach to the next big thing will work for us in the markets for the next big thing: we can be the bankers and landlords to everyone working to make the future brighter. We can build their homes, sell them tools and supplies, and meet their everyday needs.

Investing at bargain basement prices in the companies that provide these services will consistently be a profitable approach capable of delivering the returns you need to make your goals a reality.

Have a fantastic New Year. I will be back in January to show you more ways to uncover the hidden profits in the unexplored corners of the financial markets.

Until then!
It’s not REITs or blue chips like Disney. A small, little-talked about area of the dividend stock market is pumping out market-beating returns like no tomorrow. Over 22 years, they’ve handily beat the market… and I have the #1 stock of these to give you now.

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Golden Pattern For Silver, Not Gold

Silver futures continue to maintain leadership not only among metals, but compared to all futures as we can see in the leaderboard below.
Chart courtesy of finviz.com
The white metal has seen gains of close to ten percent month-to-date. None of the metals come close as copper futures, formerly the number two, has lost its shine lately as I shared the reason last week. When compared to silver futures, gold futures appear pale with gains of 2.62%.   

All last week, I observed a pattern in the making, watching to see when it would trigger. As a result, exactly at the end of last week, the expected event happened. Here is a visual representation in the daily chart below.
Source: TradingView
There are two simple moving averages in the silver daily chart above. The blue line represents a 50-day moving average and the red one is a 200-day moving average. We can see that last week the short-term blue line crossed above the long-term red line. This pattern is called a “Golden Cross”. It is a bullish sign as it indicates a change in the trend to the upside.
The silver market seems to be waking up from its long hibernation within a large consolidation, which was also indicated by flat moving averages and a deep crossover to the downside during the last leg down.
Let’s get down to measurements to find out how high the silver futures could skyrocket on this bullish confirmation pattern. History could be helpful for us. The last time this crossover pattern occurred was in the summer of 2020. The following rally, both in price and in the blue moving average, took silver futures price to almost $30 for almost $13 from the crossover price of $17.
The current Golden Cross appears at the price close to $21. The target is located $13 above at $34. It is over $10 or 42% potential gain for silver investors.
There is another alert we can see on the chart. Since the beginning of the month, the RSI indicator has not followed the price because it shows lower peaks that contradict the higher highs on the price chart. Such a pattern is called a Bearish Divergence and the outcome won’t please silver bugs.

Since the market needs a break to build up energy for the expected rally, it should consolidate. The price could retest one of its moving averages before resuming bullish growth.

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The “Golden Pattern” for gold is on hold and here is why.
Source: TradingView
The blue line of the 50-day simple moving average is approaching the red 200-day simple moving average, however, it is still far from making such a coveted crossover to the upside.
The gold futures price sits on the 200-day moving average, while silver futures are much higher. This could result in sinking down to the blue 50-day moving average around $1,737 during anticipated consolidation as the RSI shows a Bearish Divergence here as well.  

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Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

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