Short Interest in McDonald's Corp. (MCD) on the Rise

CONTRIBUTOR Douglas A. McIntyre http://247wallst.blogspot.com/:

McDonald's (NYSE: MCD) seems like a very nice company, notwithstanding the fact that it sells a lot of food that can give you coronary artery disease. The company�s quarterly earnings were excellent. Revenue went up 10% to $5.88 billion, and net rose at an even better rate to $843 million.

After all the good news, McDonald�s stock moved to a 52-week high of over $42. The stock has been as low as $31.48 in the last year.

So, why does McDonald�s have the largest increase in short position of any stock traded on the NYSE? Not only was the increase large, it was spectacular. Shares short in McDonald�s went from 13.1 million to 60.5 million in the month ending in mid-October.

For a short position in a large company to rise 20% or 30% is not odd. But, for its to increase by a factor of four times is almost unheard of.

McDonald�s stock has not been this high in over six years. And, if it adds a few dollars, it could hit an all-time high. That, by itself, may be a reason to believe that the stock could come down some. Just a little bad news can take shares back a few rungs once they have had such a substantial run.

But, if McDonald�s continues to do well, whoever bet against them could lose a lot of money.

http://247wallst.blogspot.com/

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