Varma Mutual Pension Insurance Co Takes Position in Yum! Brands, Inc. $YUM

Varma Mutual Pension Insurance Co bought a new stake in Yum! Brands, Inc. (NYSE:YUM) during the second quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund bought 76,753 shares of the restaurant operator’s stock, valued at approximately $12,270,000.

Several other hedge funds have also recently added to or reduced their stakes in the business. Hsbc Holdings PLC grew its stake in shares of Yum! Brands by 5.9% in the 4th quarter. Hsbc Holdings PLC now owns 569,676 shares of the restaurant operator’s stock valued at $86,197,000 after purchasing an additional 31,836 shares during the period. Bleakley Financial Group LLC bought a new position in shares of Yum! Brands during the 1st quarter worth approximately $1,589,000. Mitsubishi UFJ Asset Management Co. Ltd. boosted its stake in Yum! Brands by 5.4% in the 4th quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 584,953 shares of the restaurant operator’s stock valued at $88,030,000 after buying an additional 30,075 shares in the last quarter. AustralianSuper Pty Ltd acquired a new stake in Yum! Brands in the 4th quarter valued at $1,264,000. Finally, QRG Capital Management Inc. grew its position in Yum! Brands by 19.8% in the first quarter. QRG Capital Management Inc. now owns 103,807 shares of the restaurant operator’s stock valued at $16,140,000 after acquiring an additional 17,189 shares during the period. Institutional investors and hedge funds own 82.37% of the company’s stock.

Yum! Brands Price Performance

YUM opened at $153.31 on Monday. The stock has a market capitalization of $41.84 billion, a P/E ratio of 19.28, a price-to-earnings-growth ratio of 2.48 and a beta of 0.55. The company’s 50 day simple moving average is $153.43 and its 200-day simple moving average is $155.98. Yum! Brands, Inc. has a one year low of $137.33 and a one year high of $170.14.

Yum! Brands (NYSE:YUM) last posted its quarterly earnings data on Thursday, July 30th. The restaurant operator reported $1.62 earnings per share for the quarter, topping the consensus estimate of $1.58 by $0.04. Yum! Brands had a net margin of 25.42% and a negative return on equity of 24.57%. The firm had revenue of $2.17 billion during the quarter, compared to analysts’ expectations of $2.18 billion. During the same quarter in the previous year, the company posted $1.44 EPS. Yum! Brands’s revenue was up 12.2% on a year-over-year basis. As a group, analysts anticipate that Yum! Brands, Inc. will post 6.42 EPS for the current year.

Yum! Brands announced that its Board of Directors has approved a stock repurchase program on Tuesday, June 16th that allows the company to buyback $4.00 billion in shares. This buyback authorization allows the restaurant operator to buy up to 9.4% of its stock through open market purchases. Stock buyback programs are generally an indication that the company’s board of directors believes its shares are undervalued.

Wall Street Analyst Weigh In

A number of research analysts have issued reports on the company. Evercore reissued an “outperform” rating on shares of Yum! Brands in a report on Tuesday, June 16th. Wells Fargo & Company upped their target price on shares of Yum! Brands from $160.00 to $165.00 and gave the stock an “equal weight” rating in a report on Thursday, April 30th. UBS Group reissued a “buy” rating on shares of Yum! Brands in a report on Thursday, June 18th. Deutsche Bank Aktiengesellschaft restated a “hold” rating and issued a $174.00 price target on shares of Yum! Brands in a research report on Friday, July 31st. Finally, Argus decreased their price objective on shares of Yum! Brands from $185.00 to $180.00 and set a “buy” rating on the stock in a research note on Monday, August 17th. Twelve research analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the company. According to MarketBeat, the stock has an average rating of “Moderate Buy” and an average price target of $174.65.

Key Stories Impacting Yum! Brands

Here are the key news stories impacting Yum! Brands this week:

• Positive Sentiment: Yum! Brands outlined a renewed consumer-growth strategy centered on strengthening brand engagement, digital capabilities, loyalty programs and operational execution across KFC, Taco Bell and Pizza Hut. The emphasis on personalized customer experiences and technology could support sales and franchisee performance. Yum! Brands Reveals New Path for Consumer Growth
• Positive Sentiment: The company appointed former HanesBrands CEO Steve Bratspies to its board, effective August 26. His experience managing global consumer brands and improving operations may add expertise as Yum! pursues growth and evaluates its portfolio. Yum! Brands Appoints Steve Bratspies to Board
• Neutral Sentiment: Pizza Hut is using a football-themed branding promotion ahead of the NFL season. The marketing effort could increase near-term visibility, but it comes as Yum! advances the multibillion-dollar sale of the chain, making the strategic implications more important than the promotion itself. Pizza Hut Branding Change
• Negative Sentiment: Shares faced pressure after Yum! announced a new chief executive officer. Although a leadership change could bring fresh momentum, investors may be concerned about execution risk and the direction of the company during the transition. Yum! Brands Slides on Naming New CEO
• Negative Sentiment: An insider reportedly reduced a Yum! Brands equity stake by 28%, while executive share withholding related to restricted-stock-unit vesting was also disclosed. These transactions are not necessarily signals of deteriorating fundamentals, but they can weigh on sentiment. Yum! Brands Insider Sale
• Negative Sentiment: Pomerantz LLP said it is investigating potential claims on behalf of Yum! investors. The announcement does not establish wrongdoing, but it adds legal and reputational uncertainty to the stock. Pomerantz Investor Investigation

Insider Buying and Selling

In related news, CEO Scott Mezvinsky sold 268 shares of the firm’s stock in a transaction dated Monday, August 3rd. The stock was sold at an average price of $153.15, for a total value of $41,044.20. Following the transaction, the chief executive officer owned 483 shares in the company, valued at $73,971.45. This trade represents a 35.69% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Aaron Powell sold 6,001 shares of Yum! Brands stock in a transaction dated Wednesday, July 1st. The stock was sold at an average price of $160.42, for a total value of $962,680.42. Following the completion of the sale, the chief executive officer owned 12,003 shares of the company’s stock, valued at approximately $1,925,521.26. The trade was a 33.33% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 18,549 shares of company stock worth $2,890,168. 0.14% of the stock is currently owned by company insiders.

Yum! Brands Profile

Yum! Brands, Inc (NYSE: YUM) is a global quick-service restaurant company that develops, operates and franchises a portfolio of well-known restaurant brands. The company’s principal brands are KFC, Pizza Hut and Taco Bell, each focused on distinct product categories—KFC on fried chicken and related menu items, Pizza Hut on pizza and complementary offerings, and Taco Bell on Mexican-inspired quick-service food. Yum! is headquartered in Louisville, Kentucky and was formed as Tricon Global Restaurants in 1997 when PepsiCo spun off its restaurant businesses, later adopting the Yum! Brands name.

The company’s operating model centers on brand development, system growth and franchising; a large portion of its restaurants are operated by independent franchisees, and Yum! generates revenue through franchise royalties and fees in addition to sales from company-operated locations.