Joey Wat, CEO of Yum Brands China (YUMC), recently purchased 3,800 shares. The buy increased his position by 1%, and came to a total cost of $129,109.
He was joined by the company CTO, who bought 4,000 shares a day later, paying $133,430, increasing her stake by 11%. And one of the company’s General Managers also bought 3,700 shares for $128,267. All three buys mark the only insider activity so far this year.
Overall, Yum Brands China insiders own 0.3% of shares.
The parent company for Taco Bell, KFC, Pizza Hut, and others in China is down 35% over the past year.
China’s economy has grown, but more slowly than expected. As a result, Yum Brands China has seen its revenues rise by just 1% over the past year, although earnings expanded by 8%.
Even with that lackluster growth, shares now trade at 16 times earnings, a reasonable price given the value of the restaurant brands and the long-term power of the Chinese consumer market.
Action to take: Investors may like shares here, near the stock’s 52-week low. At current prices, Yum Brands China also pays a 1.9% dividend.
For traders, shares have started to show signs of a new uptrend in recent weeks. With a potential year-end rally in mind, the January 2025 $37.50 calls, last trading for about $1.65, could see mid-double-digit returns or better over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.