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Best Bargains: Yum! Brands Far From Fried

But here's the thing: Despite these results, management offered guidance that suggests the worst is over. The projected 20% increase in earnings per share for all of 2014 shows how confident the company is in its business.

I don't believe management would go out of their way to put undue pressure on performance. I take this as some light at the end of the tunnel.

[Read: Funding Retirement with Insurance Coverage]

The other thing to remember here is that the Chinese economy is still in recovery mode. While it's true that management may have gotten burned with some bad press, there's more reason to believe that China's economy is now more to blame in Yum!'s underperformance than, say, any lingering effects the company may feel from past scandals. The results I've seen from McDonald's (MCD) support this theory.

So it still remains to be seen if management's bet on China remains too high. The call for 20% earnings-per-share growth in 2014 would put Yum! back into familiar territory of solid double-digit EPS growth. With some luck and solid execution, Yum! can immediately reverse the decline in both same-store sales and net income.

That makes this stock one of the best bargains on the market.

At the time of publication, the author held no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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