In today's edition of "Buy, sell, or Hold," analyst Austin Smith puts a hold rating on Arcos Dorados. As the largest global franchiser of McDonald's, there is an enormous upside potential, but Latin America has been a notoriously difficult market to operate in, and current macroeconomic factors such as currency fluctuations and a soft Brazilian economy could become anchors in the future. At the same time, shares got slammed recently and may have created just the opportunity that investors previously on the sidelines were waiting for. Not only that, with rapidly rising economies comes an increase in consumer spending, which plays well into Arcos Dorados' growth story. Given the combination of huge potential gain and huge uncertainty outside of Arcos Dorados' control, existing shareholders should stay put for the long run.
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Austin Smith owns shares of McDonald's. The Motley Fool owns shares of Arcos Dorados, MercadoLibre, and Starbucks. Motley Fool newsletter services recommend Arcos Dorados, McDonald's, MercadoLibre, Starbucks, and Yum! Brands. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.