Buy these Next Superstar Stocks - Investment Ideas - Coca-Cola (NYSE:KO), McDonald's (NYSE:MCD)

Nobody's getting their stock quotes in fractions from the pages of the Wall Street Journal. We're not worried about whether or not that phone call we make is long-distance or local. And we're certainly not pounding those numbers out on a rotary phone, if we're actually putting in the numbers at all. So why are you still investing in dinosaur companies that are collapsing under their own weight?

This earnings season should be a wake-up call for many investors. Those bellwethers of yesterday are not the well-run companies that offer great value and a healthy dividend. They are behemoths struggling to regain their footing as the market changes rapidly around them. Here we've got three huge companies grandpa bought in the 1970s for you that you need to reassess for the next forty years.

Out With the Old: McDonald's MCD

When McDonald's released earnings on October 21^st, the report showed lower revenues, operating income and earnings per share. President and CEO Don Thompson said “McDonald's third quarter results reflect a significant decline versus a year ago, with our business and financial performance pressured by a variety of factors – from a higher effective tax rate, to unusual events in the operating environments in APMEA and Europe, to under-performance in the U.S. While our ability to withstand these factors is a testament to the Company's enduring brand and strong financial foundation, by all measures our performance fell short of expectations.”

McDonald's saw EPS decrease 28%. Global comparable sales fell 3.3%, while APMEA (Asia-Pacific, Middle-East and Africa) comparable sales decreased 9.9%. Where can McDonald's find growth if not in the developing economies of the world? With same store sales down like this it puts a damper on expansion plans in the area as well. Looks like it may be time to flip this burger because it's done.

In With the New: Zoes Kitchen ZOES

Depending on where you live in the US, you may or may not have heard of Zoes Kitchen. From the Zoes Investor Relations page, “Founded in 1995, Zoes Kitchen is a fast casual restaurant concept serving a distinct menu of fresh, wholesome, Mediterranean-inspired dishes delivered with Southern Hospitality.” Already the company has more than 125 locations in 15 states.

Since 2009, revenue has seen a CAGR of 53.9% with 17% of revenue from catering. The average per customer spend is $9.57. Zoes has managed to differentiate itself from other fast casual restaurants by expanding its “Lifestyle Brand” with a loyal customer base. Their diverse revenue mix provides multiple levers for growth in the future. The demographics certainly support this. Women along with their families represent about 70% of customer visits, with average household income over $100k.

Analysts have taken note as well, with four raising earnings estimates for the current year and two upping the ante for next year. This pushed consensus up from 1 cent per share to 3 cents for the current year and added a penny to next year's consensus, which now sits at 8 cents per share. The bullish action has helped earn Zoes a Zacks Rank #2 (Buy).

Out With the Old: Coca-Cola KO

That sugary, bubbly liquid we all love has been fizzling out recently. In Q3 2014 global volume growth was 1% in the quarter and 2% year-to-date. EPS was $0.48, a drop of 13%. Add to that the continuing currency headwinds the company is likely to face next quarter and your sweet-tooth for investing may want to find another place to go.

Muhtar Kent, Chairman and CEO said of Q3, “Earlier this year, we announced five strategic priorities to restore momentum and reinvigorate long-term sustainable growth. While we have begun to see early signs of progress, we recognize that we need to increase the scope and pace of change as we continue to face a challenging macroeconomic environment. We are therefore taking actions to strengthen our long-term financial performance…”

In With the New: Monster Beverage MNST

While you're stuck in Cola-Cola waiting for the long-term sustainable growth to be “reinvigorated” you could already be on the forefront with Monster Beverage. Last year, gross sales rose to $2.59 billion from $2.37 billion the year before. That's a 9.2% increase year over year and marked the 21^st consecutive record year of increased gross sales. Monster continues to expand the distribution of its Monster Energy drinks into new international markets. In 2013 sales outside the US increased by 12.9% while Monster expanded its footprint to 114 countries and territories on six continents.

Monster is a Zacks Rank #2 (Buy) due to recent earnings revisions to the upside for the current quarter and the current year. The recent bullish sentiment among analysts has pushed consensus for this quarter up from 66 cents to 68 cents per share and next year's consensus up from $2.53 to $2.60. Another factor in the favorable rank is last quarter's 5 cent surprise with earnings for Q2 2014 coming in at 81 cents.

Bottom Line

In the animal kingdom, animals adapt or die. It's a dog-eat-dog world out there and if these old stalwarts don't adapt, they will die as well and take your investment with them. Try to shift a few bucks to companies who have plans for the decade ahead, not revel in the glory of decades past.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.

Click to get this free report

ZOES KITCHEN ZOES: Free Stock Analysis Report

MONSTER BEVERAG MNST: Free Stock Analysis Report

MCDONALDS CORP MCD: Free Stock Analysis Report

COCA COLA CO KO: Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Market News and Data brought to you by Benzinga APIs