5 Popular Stocks Past Their Prime

Sell Starbucks; Buy McDonald’s

This one is easy. The golden arches are giving the coffee club a good, old-fashioned whooping.

McDonald’s (MCD), of course, was always positioned to do well in a weak economy. Its value pricing
is the perfect tonic for distressed budgets. But now McDonald’s is leveling Starbucks (SBUX) with
a frontal assault on the premium coffee business.

In the works for years, MCD’s idea of premium coffee at reduced prices was laughed at by the coffee snobs. But they’re not laughing anymore. A quality
product at a lower price has hit Starbucks where it hurts.

Sure, Starbucks has had its own problems stemming from growing too fast and opening too many locations, but the attack from McDonald’s has hurt
its performance. Starbucks foray into food has yet to pay any dividends, and I doubt it ever will.

McDonald’s is the stock to own, and Starbucks is the stock to sell.

NEXT: Target vs. Wal-Mart