Trade-Ideas: Yum Brands (YUM) Is Today's Unusual Social Activity Stock

Trade-Ideas LLC identified Yum Brands (YUM) as an unusual social activity candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Yum Brands

(

YUM

) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified Yum Brands as such a stock due to the following factors:

  • YUM has 15x the normal benchmarked social activity for this time of the day compared to its average of 4.03 mentions/day.
  • YUM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $298.4 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

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More details on YUM:

YUM! Brands, Inc., through its subsidiaries, operates quick service restaurants. It operates in four segments: YUM China, the KFC Division, the Pizza Hut Division, and the Taco Bell Division. The stock currently has a dividend yield of 2.1%. YUM has a PE ratio of 28. Currently there are 8 analysts that rate Yum Brands a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Yum Brands has been 3.0 million shares per day over the past 30 days. Yum has a market cap of $34.9 billion and is part of the services sector and leisure industry. The stock has a beta of 0.90 and a short float of 2.4% with 2.69 days to cover. Shares are up 18% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Yum Brands as a

hold

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • YUM BRANDS INC has improved earnings per share by 14.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, YUM BRANDS INC increased its bottom line by earning $2.92 versus $2.29 in the prior year. This year, the market expects an improvement in earnings ($3.67 versus $2.92).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, YUM BRANDS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • YUM, with its decline in revenue, underperformed when compared the industry average of 11.0%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • YUM has underperformed the S&P 500 Index, declining 6.21% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The debt-to-equity ratio is very high at 30.97 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.29, which clearly demonstrates the inability to cover short-term cash needs.

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