McDonald's Undervalued Status Attracts Value Investors
Value investors and options traders Travis and Carlisle of The Acquirers Multiple recently discussed their strategy for profiting from undervalued businesses, specifically McDonald's.
The duo sold a put option at $260 with a premium of around $3.50, allowing them to collect the premium while also giving them the opportunity to buy shares if the price drops further.
Citing McDonald's 52-week low and its significant real estate portfolio worth roughly $100 billion, Travis emphasized that the valuation is now more compelling, with a high teens earnings multiple and reasonable dividend yields well above the S&P 500.
The pair also sold a call option at $265 with a relatively short term, allowing them to collect a premium while potentially profiting from the sale of the shares if exercised.