Monday, May 13, 2013

Investopedia: The Market Seems Unwilling To Let Yum! Brands Stay Cheap For Long

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:

No comments: