Cullinan Associates Inc. Trims Holdings in Yum! Brands, Inc. $YUM

Key Points

• Cullinan Associates Inc. cut its Yum! Brands stake by 24.2% in the first quarter, selling 7,839 shares and leaving it with 24,556 shares valued at about $3.82 million.
• Insider selling continued, with CEO Scott Mezvinsky and CEO Sean Tresvant both selling shares; insiders sold 12,423 shares worth about $1.95 million over the last 90 days.
• Yum! Brands reported better-than-expected quarterly results and also authorized a $4.0 billion share repurchase program, while analysts maintain a consensus Moderate Buy rating and target price of $176.12.

Cullinan Associates Inc. reduced its position in shares of Yum! Brands, Inc. (NYSE:YUM - Free Report) by 24.2% in the 1st quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The firm owned 24,556 shares of the restaurant operator's stock after selling 7,839 shares during the period. Cullinan Associates Inc.'s holdings in Yum! Brands were worth $3,818,000 as of its most recent filing with the Securities & Exchange Commission.

Several other hedge funds have also made changes to their positions in the business. Hsbc Holdings PLC increased its holdings in Yum! Brands by 5.9% during the 4th quarter. Hsbc Holdings PLC now owns 569,676 shares of the restaurant operator's stock worth $86,197,000 after purchasing an additional 31,836 shares during the period. Mitsubishi UFJ Asset Management Co. Ltd. raised its position in shares of Yum! Brands by 5.4% during the 4th quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 584,953 shares of the restaurant operator's stock worth $88,030,000 after acquiring an additional 30,075 shares in the last quarter. AustralianSuper Pty Ltd acquired a new stake in Yum! Brands during the fourth quarter worth approximately $1,264,000. Ethos Capital Management Inc. acquired a new stake in Yum! Brands during the 4th quarter worth $1,372,000. Finally, Hudson Bay Capital Management LP acquired a new stake in shares of Yum! Brands during the third quarter worth about $24,786,000. Institutional investors and hedge funds own 82.37% of the company's stock.

Insider Buying and Selling

In other news, CEO Scott Mezvinsky sold 277 shares of the business's stock in a transaction that occurred on Friday, May 1st. The shares were sold at an average price of $160.48, for a total value of $44,452.96. Following the completion of the transaction, the chief executive officer owned 483 shares of the company's stock, valued at $77,511.84. The trade was a 36.45% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Sean Tresvant sold 3,000 shares of the company's stock in a transaction that occurred on Tuesday, May 26th. The shares were sold at an average price of $154.68, for a total transaction of $464,040.00. Following the transaction, the chief executive officer directly owned 3,140 shares in the company, valued at $485,695.20. The trade was a 48.86% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 12,423 shares of company stock worth $1,953,721 in the last 90 days. 0.14% of the stock is currently owned by corporate insiders.

Yum! Brands Price Performance

Yum! Brands stock traded up $1.19 during mid-day trading on Friday, hitting $163.57. 1,847,140 shares of the company were exchanged, compared to its average volume of 2,285,954. The business's 50 day simple moving average is $154.51 and its two-hundred day simple moving average is $156.84. The company has a market capitalization of $45.08 billion, a P/E ratio of 26.38, a PEG ratio of 2.10 and a beta of 0.56. Yum! Brands, Inc. has a 12-month low of $137.33 and a 12-month high of $170.14.

Yum! Brands (NYSE:YUM - Get Free Report) last issued its quarterly earnings data on Wednesday, April 29th. The restaurant operator reported $1.50 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.39 by $0.11. The business had revenue of $2.06 billion for the quarter, compared to the consensus estimate of $2.04 billion. Yum! Brands had a negative return on equity of 23.51% and a net margin of 20.48%.The business's revenue was up 15.2% on a year-over-year basis. During the same period in the prior year, the business earned $1.30 earnings per share. Equities research analysts predict that Yum! Brands, Inc. will post 6.72 earnings per share for the current year.

Yum! Brands declared that its Board of Directors has authorized a share repurchase program on Tuesday, June 16th that allows the company to buyback $4.00 billion in outstanding shares. This buyback authorization allows the restaurant operator to buy up to 9.4% of its shares through open market purchases. Shares buyback programs are often an indication that the company's leadership believes its stock is undervalued.

Yum! Brands Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, June 12th. Investors of record on Wednesday, May 27th were paid a $0.75 dividend. The ex-dividend date of this dividend was Wednesday, May 27th. This represents a $3.00 annualized dividend and a yield of 1.8%. Yum! Brands's payout ratio is presently 48.39%.

Wall Street Analysts Forecast Growth

A number of research firms have commented on YUM. TD Cowen restated a "buy" rating and issued a $180.00 price objective on shares of Yum! Brands in a research note on Tuesday, June 16th. Wells Fargo & Company boosted their target price on Yum! Brands from $160.00 to $165.00 and gave the stock an "equal weight" rating in a research report on Thursday, April 30th. Royal Bank Of Canada reissued a "sector perform" rating and issued a $165.00 target price on shares of Yum! Brands in a report on Monday, April 20th. Citigroup increased their target price on shares of Yum! Brands from $174.00 to $175.00 and gave the company a "neutral" rating in a report on Thursday, April 30th. Finally, UBS Group reiterated a "buy" rating on shares of Yum! Brands in a research report on Thursday, June 18th. Twelve investment analysts have rated the stock with a Buy rating and seven have assigned a Hold rating to the company's stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $176.12.

Yum! Brands Company 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.

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