(Toronto Star) McDonald’s Corp., world’s largest fast-food chain, has been turning cartwheels to please investors. But to little avail.<\/p>\n
It’s one of many blue-chip firms in the United States and Canada coping with a speculative assault that in some ways has eclipsed the buccaneering exploits of T. Boone Pickens and his ilk in the 1980s.<\/p>\n
After a dismal half-decade of sluggish sales in which McDonald’s seemed to be reaching the limits of growth, the 50-year-old company successfully revamped its menu and streamlined operations to produce its biggest sales gains in 17 years in 2004 \u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u009d up 11 per cent, to $19.1 billion (U.S.). Profits jumped 55 per cent, to $2.3 billion.<\/p>\n
To goose “shareholder value,” the Holy Grail for short-term investors, the firm based in the Chicago suburb of Oak Brook, Ill., bought back $1 billion worth of its shares, and promises to further reward investors with an additional $5 billion to $6 billion in share buybacks and dividend hikes over the next two years.<\/p>\n
McDonald’s could reap another $1 billion by following through on a hinted partial spin-off of its Chipotle Mexican Grill chain.<\/p>\n
Not good enough, says a New York hedge fund with a mere 4.9 per cent stake in one of the most consistently well-run companies of the past half-century, which has overcome the only rough patch in its history despite the tragic deaths of two able CEOs in the past 17 months.<\/p>\n