Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Yum Brands as such a stock due to the following factors:
- YUM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $256.7 million.
- YUM has traded 3.2 million shares today.
- YUM traded in a range 229.3% of the normal price range with a price range of $2.81.
- YUM traded above its daily resistance level (quality: 530 days, meaning that the stock is crossing a resistance level set by the last 530 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on YUM:
YUM! Brands, Inc., together with its subsidiaries, operates quick service restaurants in the United States and internationally. It operates in six segments: YUM Restaurants China, YUM Restaurants International, Taco Bell U.S., KFC U.S., Pizza Hut U.S., and YUM Restaurants India. The stock currently has a dividend yield of 2%. YUM has a PE ratio of 30.9. Currently there are 7 analysts that rate Yum Brands a buy, no analysts rate it a sell, and 14 rate it a hold.
The average volume for Yum Brands has been 3.4 million shares per day over the past 30 days. Yum has a market cap of $32.9 billion and is part of the services sector and leisure industry. The stock has a beta of 0.47 and a short float of 1.8% with 2.38 days to cover. Shares are up 8.9% year to date as of the close of trading on Wednesday.
rates Yum Brands as a
. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- YUM, with its decline in revenue, slightly underperformed the industry average of 0.8%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- YUM BRANDS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, YUM BRANDS INC increased its bottom line by earning $3.37 versus $2.74 in the prior year. For the next year, the market is expecting a contraction of 13.8% in earnings ($2.91 versus $3.37).
- In its most recent trading session, YUM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Net operating cash flow has declined marginally to $824.00 million or 7.82% when compared to the same quarter last year. Despite a decrease in cash flow of 7.82%, YUM BRANDS INC is in line with the industry average cash flow growth rate of -14.88%.
- Even though the current debt-to-equity ratio is 1.34, it is still below the industry average, suggesting that this level of debt is acceptable within the Hotels, Restaurants & Leisure industry. Despite the fact that YUM's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.55 is low and demonstrates weak liquidity.
- You can view the full Yum Brands Ratings Report.