This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

The Five Dumbest Things on Wall Street This Week: Feb. 1

4. Yum Cries Fowl

A batch of bad Chinese chicken cooked Yum's (YUM) goose. Now here come the vultures.

The official Xinhua news agency confirmed on Friday that chicken sold to KFC's parent Yum Brands in China contained excessive levels of chemicals. The Shanghai Municipal Food Safety Committee said KFC's checks on its suppliers were sloppy, and that it found extreme levels of antibiotics and steroids in the restaurant's supplies.

First of all ... ick! The very thought of biting into a drumstick that contains more banned substances than Lance Armstrong makes us ill.

Second of all ... ouch! Yum warned the market in early January that its China sales were being jeopardized due to its chicken-supplier problems, but we really thought it would have died down by now. This most recent report only adds to the reputational injury the fast food chain has already sustained in its largest market. Yum shares have fallen half a percent in the past month due to its China woes, even as the S&P 500 has surged almost 8%.

For the record, shares of McDonald's (MCD) are slightly outpacing the market over the same period, even though the company admitted to a similar chicken-supplier problem in China. McDonald's CEO Don Thompson said last Wednesday the chicken scare "minimally impacted" McDonald's sales in China during the fourth quarter, although it is weighing on its sales so far this year.

The drop in Yum's stock has spurred a slew of class-action lawyers -- yes, those are the vultures -- to sue the company in the past week. The lawsuits allege that Yum "knew but failed to adequately disclose" months ago both the slowdown in its China sales, as well as its chicken-supplier problems.

Honestly, we don't know whether the plaintiffs have a leg to stand on in this high-stakes game of chicken. Nevertheless, we do suggest that McDonald's beef up its supplier checks all over the globe.

The last thing Mickey Ds needs is for those ravenous class-action lawyers to have a cow over its burgers.

2 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
HLF $31.45 0.00%
AAPL $128.54 0.00%
FB $80.90 0.00%
GOOG $573.37 0.00%
TSLA $202.44 0.00%

Markets

DOW 18,096.90 -106.47 -0.58%
S&P 500 2,098.53 -9.25 -0.44%
NASDAQ 4,967.1410 -12.76 -0.26%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs