On May 17th, 2023, it was reported that First Trust Advisors LP had trimmed its holdings in Yum! Brands, Inc. Shifting its stake by 7.1%, the firm now has ownership of just over 619,000 shares of the multinational restaurant operator’s stock. This reduction follows a disclosure with the Securities and Exchange Commission (SEC), which also reported insider sales from Yum! Brand’s CEO David W. Gibbs and insider Scott Catlett.
Yum! Brands, Inc., widely known for its sub-brands KFC, Pizza Hut, Taco Bell and Habit Burger Grill, operates as a service restaurant company supplying worldwide demand for quick meal options. Remaining one of the top-performing operators in this space requires innovation in both tactics and operations to please discerning tastes amidst growing competition. With subsidiaries including China Division Yum China Holdings Inc., Yum! Brands remains focused on creating lasting value for all stakeholders.
Although the SEC filing does not specify why First Trust Advisors reduced their position in Yum! Brands, speculation may point towards existing market turbulence that could be moving investors to cash out with lower costs or hesitation around high valuations of restaurant stocks currently trading on markets.
Another notable point is how insiders at Yum! Brand have been selling off shares themselves recently as well. On May 15th alone, CEO David W. Gibbs sold over three thousand shares worth almost $545 thousand US dollars – bringing his total stock value down to about $7.9 million dollars. Similarly, insider Scott Catlett sold over two thousand shares at an average price of $140 per share.
Overall though, it should be noted these transactions represent only a modest portion of daily trading activity and sentiments can change rapidly within this industry given increasing COVID-19 vaccination rates globally currently accompanying recovery from a pandemic-led economic downturn.
Investors looking to invest into pre-existing established foodservice companies may still find opportunities within the Yum! Brand’s family of companies, especially in diversified geographies where each brand can leverage existing knowledge to better compete on the world stage. And despite recent insider sales activity, market analysts may see this as just an adjustment spurred by the need to hedge portfolios without directly being indicative of any larger trend.
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Institutional Interest in Yum! Brands Inc. Sparks Stock Surge and Positive Analyst Ratings
Yum! Brands, Inc, the popular fast-food restaurant operating company has seen a surge in interest from institutional investors recently. According to reports, several institutional investors bought and sold shares of YUM, which pushed the company’s stock prices up.
U.S Capital Wealth Advisors LCC were among the institutional investors who purchased a new stake in YUM! Brands during the fourth quarter of 2022, with a sum worth $26,000. Another investor, Bell Investment Advisors Inc soared its holding by 127.7% in Yum! Brands by purchasing an additional 120 shares worth $27,000 during that timeframe. Dupont Capital Management Corp also purchased a new stake in Yum! Brands during Q4 of 2022 with an amount of $29,000. Plus Marquette Asset Management LLC and WFA of San Diego LLC both followed suit by purchasing their own stakes in Yum! Brands for around $31k each.
It’s worth noting that over three-quarters (77.54%) of all available stocks are currently owned by hedge funds and other institutional investors.
The food chain brand famous for KFC, Pizza Hut and Taco Bell restaurants has also caught the eyes of research analysts as they increase price objectives on yum stock following strong performance and solid financial results for Q1 FY23 investors.
For instance Credit Suisse Group recently raised the price objective on Yum! Brand’s shares from $135 to $141 reporting that they were a good choice for investment while Wells Fargo & Company initiated coverage and assigned them a “overweight” rating with a price objective set at $145. StockNews.com upgraded their rating from “hold” to “buy,” while BMO Capital Markets increased its price objective from $140 to $144.
Deutsche Bank Aktiengesellschaft also rated the company as “buy,” raising their target price on Yum! Brands’ share values from $137 to $143. Across the board, analysts have provided an average rating of “moderate buy” with an average consensus target price hovering around the $147.11 mark.
Yum! Brands stands as a service restaurant company with over 50,000 outlets all over the world consisting of various segments, including KFC Division, Pizza Hut Division, Taco Bell Division and Habit Burger Grill Division.
As on May 17th 2023, YUM stock opened at $138.78 according to Bloomberg.com. The company’s PE ratio is at 32.65 with a market cap of $38.87 billion and subsequently weighed by a beta of 1.00. Additionally, Yum! Brands has a price-to-earnings-growth ratio (PEG) which currently stands at approximately 2.21 . For those tracking its performance there’s good news as YUM’s twelve month high remains at $143.24 which was last reached back in Q2 FY23 whereas its year-long low was recorded in Q4 FY22 sitting abundantly at only $103.96.
During the recent Q1 earnings report dated May 3rd 2023, Yum! Brands beat expectations despite coming up slightly short when it came to analyst projections in its quarterly earnings reports earning $1.06 per share compared to estimated projections standing at $1.14 per share for that quarter alone with revenue reportedly standing at approximately $1.65 million for that period ahead of analyst estimates ($1.62 million). The firm’s quarterly revenue showed growth rate YoY which rose almost by 6.3%.
