McDonald's going green, balance sheet could get greener

Where would you want to open a prototype "green" restaurant? McDonald's (MCD) has decided to do so on the south side of Chicago. The new restaurant starts with the typical standalone McDonald's unit we are used to seeing and uses "smarter design elements" to save the store 25 percent per year in utility bills.

What are the changes? The new store will use heat recovery devices to recycle cooking heat. Storm water runoff from the parking lot will be collected and used for irrigation. Plants will be stationed on the roof to provide insulation and further water control. Skylights will augment and eliminate the need for some electric lighting, and tables will be made from recycled plastic. In addition, cardboard food containers will be produced from recycled material.

McDonald's is calling the new restaurant a "green learning laboratory" for future design concepts for use at its 31,000 worldwide locations. The author of the WalletPop article linked to above dismisses these moves as irrelevant on a social scale (although Al Gore can now park his hybrid in special spots when he gets a Mickey D's craving), but will it help the stock? Let's see.

On a monthly basis, McDonald's is still performing well. Yes, the stock as backed away from resistance at the $60 level and its 10-month moving average, but the stock could find some support from its rising 50-month moving average. Yes, this trend line is a ways away, but any consolidation from the stock could allow the moving average to catch up. The intermediate-term picture isn't quite as rosy, but the stock has found support at the $52 level. In fact, it appears that a triple-bottom has been established and could lead to a run higher.

Keep an eye on McDonald's; it seems to have weathered the economic downturn well. Perhaps Americans will continue to enjoy the offerings of the dollar menu as the economy continues to struggle. If this is the case, Ronald and the gang could enjoy further upside.


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