Yum! Brands (YUM)

Re: Yum! Brands (YUM)

Postby winston » Tue Oct 20, 2015 9:11 pm

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Yum! Brands May Not Get A Lift Even After The China Spinoff By Shuli Ren

Bloomberg reported that Yum! Brands (YUM), the owner of KFC and Pizza Hut, is in advanced preparation to spin off its China business.

Yum last week added activist investor Keith Meister of Corvex Capital to its board after posting disappointing third-quarter same store sales in China. Meister has suggested Yum could boost its worth by $16 a share by spinning off its China business.

Goldman Sachs disagrees. Using sum-of-the-parts analysis, the bank estimates that investors are paying 5.6-6.9 times earnings for Yum’s China business. On the top end of its estimated range, this valuation is hardly below Yum’s Chinese peer average of 7 times.

Analyst Karen Holthouse and team wrote:

1) We estimate KFC/PH/TB refranchising proceeds would total $3.4bn on an aftertax basis.

(2) We estimate KFC and PH are worth $14.3bn-$15.4bn in enterprise value, which accounts for compression in the peer (QSR/DNKN/DPZ) multiple, slower top-line growth, and greater exposure to macro risks in S.E Asia, South America, and the Middle East.

(3) We estimate Taco Bell is worth $4.5-$4.9bn, which accounts for a top-line starting to decelerate against tougher compares.

(4) This implies investors are paying 5.6x-6.9x EBITDA for China vs. a Chinese peer average of 7.0x. While this appears inexpensive vs. US multiples, we struggle to determine a proper discount for the volatility/lack of

Goldman has a price target of $66 and Sell rating on Yum.

Credit Suisse is more optimistic, seeing Yum to trade as high as $82 per share, but on the premise that Yum spins off its China business AND buy back stocks with borrowed debt. “The valuation upside created by a potential separation is largely due to the leverage that would be added to the franchise company,” acknowledged analyst Jason West and team.

Yum closed at $71.71 on Monday.


Source: Barron's Asia
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Re: Yum! Brands (YUM)

Postby winston » Sun Oct 25, 2015 10:31 am

YUM Stock: Recent Split Is Simply a Sidetrack

Desperate times call for desperate measures -- there are better places for your money

By Hilary Kramer

Source: Game Changers

http://investorplace.com/2015/10/yum-br ... iw-G34rKM8
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Re: Yum! Brands (YUM)

Postby winston » Tue Oct 27, 2015 7:21 am

Restaurant Stocks: Yum Brands — Dump It

Currently, the darkest cloud looming Yum stock is its China business, which continues to deteriorate. Despite the weakness in Yum Brands’ China segment, investors have been patient.

Throughout the weak results, management stressed that China was an important pillar of growth for the company. They also continued to express their belief that a turnaround was close.

Now, there’s news that Yum brands is planning to spin off Yum Brands China into a separately traded stock. This not only erodes management’s credibility but comes with incredibly bad timing. Yum stock has been hit hard by China’s weakness, all the way down. So, when a turnaround does eventually come … who benefits? You guessed it! The upside from a turnaround is primarily going to benefit a different stock.

As if that weren’t scary enough, YUM stock carries a high multiple of 35, combined with a high debt ratio 1.5 times its equity. It’s time to jump off the Yum stock train before it completely derails.

Source: Investor Place
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Boredom Strikes! 05 (Jul 11 - Dec 15)

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Re: Yum! Brands (YUM)

Postby winston » Wed Nov 04, 2015 9:26 pm

Fast-food company Yum Brands (Taco Bell, Pizza Hut, KFC) drops 20%-plus in four months.
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Re: Yum! Brands (YUM)

Postby winston » Sun Jan 03, 2016 10:27 am

Trade of the Day: Yum! Brands (YUM)

The broader short-term trend is cautiously bullish, but this stock is operating in a tough sector facing tough trends

By John Jagerson and Wade Hansen

Source: SlingShot Trader

http://investorplace.com/2015/12/yum/?s ... oiGNxV96M8
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Re: Yum! Brands (YUM)

Postby winston » Wed Jan 13, 2016 9:08 am

Yum Brands: China Sales Rose In December

By Shuli Ren

Owner of KFC Yum Brands (YUM) posted surprisingly good December sales in China.

Yum said that same-store sales in China rose 1% in December, reversing a decline in November.

For the fourth-quarter, same-store sales there rose 2%, slightly shy of 3% expected by the street.

The company had a target range of 0 to 4%.

KFC surprised. In December, same-store sales at KFC rose 5%, offsetting a 11% decline at Pizza Hut.

Yum rose 2.8% in after-hours trading after gaining 2.3% on Tuesday.

Source: Barron's Asia
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Re: Yum! Brands (YUM)

Postby winston » Sat Sep 03, 2016 12:04 pm

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Food Stocks to Buy: Yum! Brands Inc. (YUM)

by Mike Mozart

KFC and Taco Bell owner Yum! Brands, Inc. (NYSE:YUM) is a good growth play for investors looking to invest in the fast-food market.

The company’s portfolio of restaurants have struggled in the US, but YUM has managed to make KFC one of the most popular fast-food choices in China.

In recent years, YUM has struggled to overcome poor macroeconomic conditions and increasing competition in Asia, but the company’s most recent earnings report showed that things are turning around for KFC, as same store sales rose 3% in the second quarter.

The firm is in the midst of spinning off its China arm, a move that is likely to make Yum China much more profitable.

On Friday, the company announced plans to sell part of its Chinese operations to Alibaba Group Holding Ltd (NYSE:BABA) and Ant Financial Service Group, which is likely to generate further interest in the company once it is spun off in October.

The Yum China spinoff is a benefit to YUM investors because although the new company will be a separate entity, Yum China will pay 3% royalty rate to Yum! Brands.

At the moment, YUM restaurants are struggling in the U.S. Both Taco Bell and Pizza Hut have seen a massive decline in customer interest, so the firm will need to do a bit of revamping to turn things around.

However, the influx of cash coming from the China spinoff should be enough to give YUM the capital it needs to overhaul its brands and revive customer interest.

Source: Investor Place
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Re: Yum! Brands (YUM)

Postby winston » Fri Oct 07, 2016 7:33 am

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Bad Stocks You Should Kick to the Curb: Yum! Brands (YUM)

by Mike Mozart

Few industries are hated as badly as fast food, and that put Yum! Brands, Inc. (NYSE:YUM) right in the crosshairs.

Yum! is the parent of KFC, Taco Bell and Pizza Hut, among others. And I … ahem … may frequent the Taco Bell drive-thru window a little more often than my doctor would recommend.

But it seems there aren’t a lot of cars in the line these days, and fast food is no longer a growth business. And between health activists and the “Fight for $15” labor activists, fast food is under attack.

Slowing demand, growing health-consciousness and rising labor expenses is not a recipe for success.

More than 60% of YUM’s revenues come from emerging markets, and most of that is from China. So you might think that the news isn’t all bad. But believe it or not, it actually gets worse.

The tendency toward healthier eating is not simply an American phenomenon. As incomes rise, Chinese diners are opting for healthier choices as well, and sales growth has been hard to come by for the last four years — part of why Yum is spinning off its China business at the end of October.

Adding insult to injury, Yum! isn’t cheap, trading at 25 times earnings.

I don’t see Yum! going out of business any time soon, but I also don’t see it turning things around. YUM’s latest earnings only serve to reinforce that thought.

This is a stock best forgotten about.

Source: Investor Place
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Re: Yum! Brands (YUM)

Postby winston » Thu Sep 20, 2018 9:02 am

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ADDICTIVE BRANDS LEAD TO STEADY PROFITS

Today, we're revisiting a controversial-but-profitable investment strategy...

Like it or not, companies that sell addictive products often make reliable investments. Habit-forming consumer goods like cigarettes and alcohol rake in stable cash flows. But this idea goes beyond tobacco and booze. For instance, consider fast food...

Yum Brands (YUM) is a $28 billion company known for popular fast-food chains KFC, Pizza Hut, and Taco Bell. Altogether, it has around 45,000 restaurant locations in more than 140 countries.

In the second quarter, Yum's revenues jumped more than 50% over the same period a year ago. Plus, Yum has partnered with mobile-ordering app Grubhub (GRUB) to deliver many of its favorite menu items right to your front door.

And as you can see, Yum's stock has climbed nearly 60% over the past three years... recently hitting a new multiyear high. As more and more people allow themselves frequent "cheat meals," YUM shares don't show any signs of slowing down...

Source: Daily Wealth
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