Yum! Brands (YUM)

(Top Pick Apr 29/13, Down 4.45%) SHORT. It was not a month long thesis. There were missteps in China. There are some growth problems in China.

Recommended at $66.77 now at $69.64, total return up 6.55% Stroke of bad luck due to bird flu coming into the mix. Those types of things affect things for 2 or 3 quarters, and then they go back to normal. They are highly into developing contries, and are a long term growth name, with some short term bad luck.

SHORT: Had a number of problems. They run Kentucky Fried Chicken (KFC) in China which is about half of their operating income. First they ran into problems with the quality of their chickens which turned people off from their brand. This was then followed by the avian flu. An expensive stock at about 22X earnings. Yield of 1.98%.

A little bit more of a go-go stock than McDonald’s (MCD-N). Derive a lot of their growth from their Chinese growth. Had some hiccups in December. In spite of all their troubles, the price is not dropping that much so you are not getting paid for the risk you would be taking.

(Market Call Minute.) Consumer stocks that sell into China are having a difficult time.

Fastest growing quick service restaurant in Asia by a mile. They had a tainted chicken scare that McDonalds had to face as well – a supplier. It can go significantly higher.

Short term events will cause temporary reduction in traffic but you can’t stop the growing middle class. They are looking at building out India and Africa. 2% but they always grow their dividend.

Very tied to China. We saw a stumble a while. He would go to something like Pepsi.

4^th quarter same-store sales growth in China was down a negative 4% because of the slowing Chinese economy. Feels that this figure will be positive next year. They still see lots of growth in China and will be focusing on the tier 3-6 cities for unit growth. Also focusing on India and Russia for the next decade.

Likes this one very much. Have done a marvellous job and have more to go. Wait for a bit of a pullback.

(A Top Pick Oct 12/11 . Up 38.31%.)

Growth in China is the primary reason she owns this. Over 40% of their earnings are coming from China. Stock pulled back when McDonald's (MCD-N) has announced negative comments. This company anticipates costs will stay at around 10% for the balance of the year. Continuing to grow new unit sales. Now branching into tier 3 and tier 4 cities. Targeting India and Russia as their next growth areas. Have had some good product launches in the US as well.