Yum! Brands

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I made this contribution on another thread, but I feel that this company more than deserves it's own thread.......so i will start the ball rolling

Nature of business is franchising......For example, KFC, Pizza hut, Taco Bells and Long John Silver

Yum! Brands

Results for 2009 reaffirmed our consistent record of success with 13 percent Earnings Per Share (EPS) growth, which marks the eighth straight year we delivered at least 13% growth and exceeded our 10% EPS growth target. For the full year 2009, we improved our worldwide restaurant margin by 1.7 percentage points and opened 1,467 new restaurants outside the U.S. We also grew worldwide operating profit by 9% prior to foreign currency translation, including growth of 23% in China, 5% in YRI and 1% in the U.S. Importantly, we maintained our Return on Investment Capital (ROIC) of 20% and continued to be an industry leader.

23% growth in China. Read somewhere that KFC is doing very well and quite ubiquitois in China, with local managers running the show.
Not just China but Vietnam too. KFC is one of the few fast-food joints that I saw in Hanoi. I think the other was Lotteria.

Interestingly, Macs is conspicuously absent in Hanoi. Story I heard from a fellow Singaporean there is that Macs wants to use their own beef but the Vietnamese government wants them to use Vietnamese beef so no agreement could be made...Just a story so it needs verification for those interested.

high growth rate normally will attract hyped PE number.

can high growth be repeated for very long?

just a general concern, did not research on YUM.
At least 13% is not very fast at all, according to peter lynch it will only be classified as stalwart not fast grower......

Whats interesting about Yum! Brand is that this consistency is maintained through the 2007-2009 recession.....

Most companies will experience some form of loss, before returning to profit..........I havent finish checking Yum! brands out, but it's has been v.interesting =)
Great Stock, not a good price in my opinion.

It is a stock I want to own for all the reasons mentioned, but I'm not willing to purchase at this price. I calculate YUM's intrinsic value at about $35 per share, and would be willing to buy in at $24 per share. Those numbers are far below the current price, and were only available at the depths of the last bear market (fall 2008 / spring 2009).

YUM has much going for it. It has had consistent earnings (free cash flow) growth over the last 10 years, and has maintained high ROIC (around 15%) and high profit margins. But in my opinion this growth is already priced into the stock.

I could be wrong, sometimes my calcs are on the conservative side. YUM may keep growing from here nonstop and never look back. I have the same issues valuing Coke (KO) by the way.

Also Happy Chinese New Year to all! I will have the pleasure of celebrating with a friend from Malaysia tomorrow night who always has a great party. I stopped by his house today, he was showing me the 'Lion Dance' competition. That is incredible!
The level of trust in China is much lower... Big Grin

KFC owner to repair tarnished image in China

SHANGHAI (China) — Yum Brands, the largest foreign fast-food chain in China, is strengthening its media strategy in the country in a bid to win back customer loyalty after a series of food scares that decimated sales this year.

State media and social web sites criticised Yum’s response to charges in December that there were too many chemicals in chicken dishes at its KFC restaurants. An avian flu scare earlier this year and reports of false mutton being sold in China have affected both its KFC and Little Sheep chains.

Same store sales in China have dropped sharply since the start of the year and Yum now expects April sales, set to be announced later today (May 10), to decline an annual 30 per cent

“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
I read that most viruses without a host to infect cannot survive long in our environment and atmosphere the more dangerous it is the lesser chances it has to survive, the less deadly it is the longer lifespan it has - like flu.

.. just waiting for the day like in thailand where they will give away free kfc chicken to passerby to show is safe to eat Tongue
is this a USA listed stock? If so, is there witholding tax for sell trade for this counter?
Yum has been the victim of irresponsible capitalism in China. However, it has made huge $ in the past in a cowboy country and hence its also contributing to costs of social ills...

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