Yum! Brands (YUM)

(Market Call Minute.) In the process of spinning off their Chinese operations. A lot of moving parts, and not a cheap stock.

Owner of Taco Bell, KFC and Pizza Hut. They are spinning off their problematic side of the business, which is China. Spinning out their China same-store sales story which was declining, and now it is going to be concentrated on its US side. He would say thumbs-up to this.

This has been a very strong consumer stock. Chart shows a spike early this year on top of a upward trend line, and the stock broke down below the trend line this year. It could be that the growth story might be over for this, so he would be very careful.

Has buying this for new accounts. It is now being spun off from the US company. Thinks this could be a heck of an interesting play in China. His bias is towards it because if China becomes a more consumer oriented society, and the middle class is being built up, this is good for all fast foods and restaurants.

52% of this company’s revenues come from China. The stock is trading at about 22X forward earnings with 12% long-term growth, giving it a 1.8 PEG ratio. Has a 2% dividend. Trading right at the 200 day moving average and where it goes from here is going to be interesting. Because of its relationship to China and its dependence on revenues from China he would stay away for the time being. Long-term it makes a lot of sense.

It gets more than 50% of its revenue from China, and is considered a China play. People are worried about the slowdown in China. He would much prefer to own Starbucks (SBUX-N) instead.

(Top Pick Sep 9/14, Up 14.87%) KFC, Pizza Hut and Taco Bell. 30% of earnings come from the US and the rest is outside of the US, 40% from China. The emerging middle class has increasing demand for quick serve. They do home delivery of KFC through Pizza Hut. They are now focusing on India. It is a play on emerging markets.

Their struggles with chicken quality in China have been well documented. The flipside of the story is an enormous opportunity. With 1.5 billion people, they have a big opportunity. Has an attractive yield and a decent management team. He is looking for more of a pullback in order to add to his position.

When you overlay their current turmoil of food quality and the China situation, and that they are trading at about 25X earnings, he doesn’t understand why people would make an investment in this.

(A Top Pick Aug 8/14. Up 32.08%.) Great company. Sold half of his position. Not growing domestically, but is growing internationally and doing really well. Entered into India which is going to be the new growth market.

The parent company of Pizza Hut, Taco Bell and KFC. They are really focused on China, and it has been working. In their revenues today, $7 billion comes from China compared to $3 billion from the US. Future growth is going to be China as well and he sees upside there. The challenge is, what are you willing to pay for this. Trading around 40X, which is a little rich for him.

Had great growth, but you are exposed to the China story and so there is risk things could turn bad there. They had problems with the quality of the meat there.

She still likes this and has been buying for new clients. She buys this because of the expanding middle-class in China. About 35% of their profits come from China. Stock has had kind of a rough year because there have been supplier issues into China stores, which has hurt their traffic into the stores. Thinks this will recover. It usually does, but just takes a bit of time.

(A Top Pick Dec 23/13. Up 7.59%.) Has been a tough year in China. Had bought this for the Asian exposure, and they are really expanding quickly. They had problems with the food distribution system over there and there was a big clamp down. Great growth in this name and he thinks there is a lot of opportunity. They are now moving into India.

(A Top Pick Sept 30/14. Up 1.84%.) Bought this because, looking at a long-term chart, it was bouncing off an Up Trend line. Also his fundamental analyst liked the prospects of them moving into the emerging markets. Feels the stock has lots of upside based on both fundamentals and technicals.