Perusing through the 13D filings in Barron's November 29 issue I came across news reported by InsiderScore.com regarding American International Group, Inc. (AIG). It was noted that "Fairholme Capital raised its holdings to 39,990,099 shares (29%), by buying 1,765,900 shares from Nov. 5 to Nov. 16 at prices ranging from $41.72 to $43.59."

I do not usually make mention of such things but owning 29% of a company capitalized at $5.6 billion dollars is a lot. I would even go as far as to say that in some circumstances that might equate to controlling interest. Prior to "my pal Warren" (Buffett) making an offer to acquire the Burlington Northern Santa Fe Railroad for Berkshire Hathaway (BRK.A) it only owned 23% of the outstanding shares.

This company has been on my recommended list for longer than any other company in the four and a half years that I have been writing for BloggingStocks -- with only one exception, Intuitive Surgical (ISRG). The company is EZCorp (EZPW), which beat the Street again with third quarter earnings per share of $0.56, three cents better than the analyst estimate.

Revenue for the quarter was $198.2 million, which tops the estimate of $191.01 million. The company projects 2011 earnings higher too: EPS of about $2.35 vs. an estimate of $2.25. EZCorp grew earnings by 33% and increased its footprint by 127 stores through new construction and acquisitions.

In a move sure to be incomprehensible to children in the San Francisco Bay area, free toys included in McDonald's (MCD) "happy meals" have been banned by the thoughtful and considerate San Francisco Board of Supervisors. I wonder if the supervisors will be on hand in December to explain this move to little customers first hand.

It seems incomprehensible that any politician would steal toys from children, but the move effectively does just that unless the meal meets certain health requirements. I understand that childhood obesity and proper nutrition are important issues, but it seems to me that parents are more qualified to handle them than a city's board of supervisors.

The market started well enough as McDonald's Corporation (MCD), Netflix, Inc. (NFLX), eBay, Inc. (EBAY), and several other companies posted strong earnings. Weekly jobless claims, notoriously fickle, fell 23,000 to 452,000. The total is still within the troubling range that indicates job creation is nil.

The market lost all of its morning momentum when the Philly Fed index came in slightly below expectations which was viewed as a sign by traders that better earnings are not necessarily tied to better economic fundamentals. Companies which do business in the emerging world markets like McDonald's and Caterpillar may buck US headwinds, but many firms do not enjoy that geographic diversity.

The numbers:

Dow Jones 11,146.79 +38.82 (0.35%)
S&P 500 1,180.23 +2.06 (0.17%)
Nasdaq 2,459.67 +2.28 (0.09%)

Yet again, McDonald's (MCD) has asserted itself as the Big Mac Daddy of the fast-food world, reporting that its third-quarter earnings increased 10%. Proving that it does not rely solely on hamburgers and cheeseburgers, McDonald's attributed the impressive performance to blended-ice beverages and international growth.

McDonald's pulled in an impressive $1.29 per share ($1.39 billion) during the quarter, much better than last year's same-quarter results of $1.15 per share ($1.26 billion). Quarterly revenue also increased, checking in at $6.3 billion, which is 4.3% better than a year ago.

McDonald's (MCD) is scheduled to report Q3 EPS on October 21. Overall option implied volatility of 19 is below its 26-week average of 21, according to Track Data, suggesting non-directional near-term price movement.

Chipotle (CMG) is scheduled to report Q3 EPS after the market close on October 21. November put option implied volatility is at 43, December is at 39, versus its 26-week average of 37, according to Track Data, suggesting larger near-term price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Yum! Brands (YUM) issued its fiscal Q3 report Tuesday after the bell. The shares didn't do much during the extended-hours session; they were down roughly 0.4% to $46.63. Not an exciting move, and I have to say, I can understand the lackluster initial reaction.

The company, which owns KFC, Pizza Hut, and Taco Bell, made an adjusted 73 cents per share. The consensus projection was for net income to come in at 72 cents per share. Beating by a penny is okay, but nothing spectacular -- especially when you consider that the stock is already near a 52-week high.

A situation rapidly taking shape on the West Coast may signal coming product changes for McDonald's Corp. (MCD). Investors however, appear to be rallying behind the perennial favorite, with shares of McDonald's trading up almost 1.25% as of this writing.

The issue stems from health concerns that are being voiced by local governments in California and possibly elsewhere. The assertion is that McDonald's Happy Meals, which are marketed towards children by the use of free toy giveaways, contain unacceptably high levels of sugars, sodium, and fats. Local politicians are forwarding the proposition that they shall ban McDonald's use of toys as a marketing tool if the company doesn't change the Happy Meal offering.

When I discussed Chipotle Mexican Grill (CMG) back in January, I was a bit hesitant on buying the stock. If you look at the following chart, you'll notice that I was completely wrong to be even the slightest bit bearish. The company closed on Friday at $168.31, not far from the 52-week high of $170.

According to our analyst calls from last Friday, Jefferies & Co. initiated the stock with a hold rating. The question now is, should an investor agree with such a rating? A hold may not be a technical sell, but it definitely makes you think twice about buying.

Yum! Brands (YUM), a restaurant entity whose multiple concepts compete with McDonald's (MCD) and Wendy's/Arby's Group (WEN), gave shareholders some great news this week: their dividend is going up! According to the press release, the quarterly payment is now 19% higher, coming in at 25 cents per share.

Not bad at all. Looks like management is feeling good about future cash flows. As we all know, dividend increases can be indicative of fundamental fiscal strength. And I like it when a dividend is backed by a strong portfolio that is well-recognized by consumers. Establishments like KFC and Taco Bell are strong trademarks.

Analyst Upgrades

• Baird upgraded Oshkosh (OSK) to outperform from neutral, citing valuation as it believes post-Iraq U.S. military spending concerns are overdone. The firm keeps a $42 price target for shares.
• Goldman transferred coverage on CenturyTel (CTL) with a buy from a neutral and has a $42 price target on the stock. The firm believes CenturyTel could increase buybacks and or increase its dividend given free cash generation and low payout ratio.
• Lazard Capital upgraded Hatteras Financial (HTS) to buy from hold to reflect increased dividend projections. The firm has a $30 price target for shares.
• EOG Resources (EOG) was upgraded to neutral from underperform at Credit Suisse.
• Donaldson (DCI) was upgraded to neutral from underperform at BofA/Merrill.

McDonald's (MCD) was down Monday. What a disappointment. How can Mickey D's be down when the rest of the market was up? Hey, it happens.

But here's the interesting thing about the shares. Even though they closed down 0.6% (in some sense, that isn't really down so much as it is flat) to $74.57, they're still rather close to the 52-week high of $76.26 -- and quite far off from the 52-week low of $53.88. There's something to be said for that these days, right?

If there ever was a company that could and should be bought out, it's WD-40 (WDFC). The company has been doing well in these tough times, and guidance is for more of the same.

Perhaps that is because almost every household in America probably has a can of WD-40 in the utility closet, garage or workroom in case they need to get out of a jam or just plain un-jam something. The aerosol in the blue and yellow can has been a reliable lubricant and rust preventative for decades. It is the primary revenue-generating product for the company, but it is not the only one.

"For the 24th year running that the Economist magazine has published its famed Big Mac Index; this index is a tongue-and-cheek way of measuring the purchasing power parity (PPP) -- that is, the relative overvaluation and undervaluation of the world's currencies," notes Nicholas Vardy.

The editor of The Global Stock Investor explains, "What does the Big Mac now say about the relative value of global currencies?

"According to the theory of purchasing power parity, a dollar should buy the same amount of the same good across all countries. By comparing the cost of Big Macs -- a good that is produced in about 120 countries -- the Big Mac Index calculates the exchange rate (the Big Mac PPP) that would result in hamburgers costing the same in America as they do abroad.

McDonald's Corporation (MCD) closed down 70 cents to $72.74. Overall option implied volatility of 19 is near its 26-week average according to Track Data, suggesting non-directional near term price movement.

Texas Instruments Incorporated (TXN) is hosting a mid-quarter update on September 9. Susquehanna lowered its rating to neutral from positive. September option implied volatility is at 29, December is at 33 is above its 26-week average of 31 according to Track Data, suggesting non-directional price movement.

CBOE Volatility Index-VIX up 2.53 to 26.98, S&P 500 down 1.55%.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.