Activist investor takes a bite of McDonald's

Activist investor firm Jana Partners has bought a small stake in McDonald's (MCD), stirring speculation that it may shake up the fast-food chain.

McDonald's has been dealing with intense competition and changing consumer tastes. In its most recent quarter, a key sales metric fell 3.3 percent in the U.S., the fourth consecutive quarterly drop. The Oak Brook, Ill.-based company's overall revenue and profit dropped in the third quarter as traffic fell. And in October, global sales at its locations open at last 13 months slipped 0.5 percent, including a 1 percent drop in the U.S.

R. J. Hottovy, a consumer equity strategist at Morningstar, said it's not surprising to see an activist investor get involved after two rough years for McDonald's.

"You've seen recovery among other restaurant chains, and while October's (sales) numbers look better, they are still negative," he said.

Jana Partners disclosed in a regulatory filing Friday that it holds about 840,000 shares and options for 200,000 more -- about a 0.1percent stake. That's tiny, but it's not unusual for activist investor firms to build a stake slowly.

Jana declined to comment on its decision or plans. The firm has pushed for changes at companies including PetSmart (PETM) and Walgreen (WAG).

Hottovy said it's still early to say what Jana may have planned for McDonald's, but he suspects any activist investor's top priority will be to push for improved operations. That could mean either speeding up the company's turnaround plans or introducing their own.

McDonald's has said it's working on fixing basics, such as the speed of service and order accuracy. It's also pushing to improve the image of its food, including new menu items, and has made several management changes recently.

The company said in a statement Friday that it welcomes all investments in McDonald's and that its focus remains on "maximizing shareholder value through initiatives that ultimately benefit our customers."

McDonald's shares rose 73 cents to close at $96.21 by Friday. The stock is down less than 1 percent in 2014.