When I last wrote on Yum! Brands (NYSE:YUM)
in early February, I thought the shares were cheap relative to the
long-term value but likely wouldn't stay cheap for very long. With the
shares already up 10% since then, it looks like that call is working
out. It's true that the news from the company's large China operations
remains weak, but I believe the worst has passed and the company still
has a global growth story to drive the stock.
China Is Still Bad, But Maybe Not As Bad As Feared
China has been a major source of growth and profits for Yum! Brands for
quite some time now, but that growth has gone sharply the other way
lately on a one-two punch of supplier quality problems and the avian
flu. While I don't want to soft-peddle this development, I think it's
hasty to assume that the company's KFC brand has really lost any real
long-term value in this huge market.
Please continue reading here:
http://www.investopedia.com/stock-analysis/051313/market-seems-unwilling-let-yum-brands-stay-cheap-long-yum-mcd-ccsc.aspx
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