With limited news emerging from Washington today and just hours left until the U.S. falls off the fiscal cliff and possibly back into a recession, investors and traders are hesitant to buy or sell this afternoon. The Dow Jones Industrial Average (^DJI -0.12%) has moved from negative to positive 10 times already today, but as of 12:50 p.m. EST, it's up 89 points, or 0.68%. The S&P 500 (^GSPC -0.58%) is up 0.9%, while the Nasdaq (^IXIC -1.15%) is leading the three indexes with a 1.3% gain. Currently, only four of the Dow's 30 components are trading in the red. Two of the biggest losers are Coca-Cola (KO 0.78%) and McDonald's (MCD 1.70%).
Shares of Coke are sliding by 0.56%, and McDonald's is down 0.67%, but this just means that these companies are cheaper today than they were yesterday, making this a good buying opportunity. They have a number of qualities in common which I believe make then great long-term investments. They are both well-known companies that are U.S.-based yet global. They are also the top dogs in their respected industries and have shown no signs of slowing down.
An interesting buy indicator recently arose for McDonald's. In November, one of McDonald's Directors, Richard Lenny, purchased $25,000 worth of his company's stock. The old adage that insiders have plenty of reasons to sell their stock but only one reason to buy always comes to mind when I see insiders gobbling up shares. Richard Lenny's average purchase price was $87.16, and today those same shares are only $87.40.
McDonald's has had a difficult 2012, which was certainly not as good to shareholders as 2011. The stock price is down 13.34% year to date, as competitors became more aggressive in marketing campaigns and same-store sales comps became more difficult for the company to overcome. Additionally, as Yum! Brands (YUM -0.12%) rapidly expands store counts in China, some investors wonder whether McDonald's is losing its edge.
