During the first quarter, Steve Mandel purchased 1,512,569 shares of Yum! Brands Inc. (YUM, Financial).
Yum! Brands, based in Louisville, Kentucky, is one of the world’s largest restaurant companies with nearly 43,000 restaurants in more than 130 countries and territories. Yum! Brands is currently ranked #228 on the Fortune 500 list with revenues of more than $13 billion in 2015 and is named one of the Aon Hewitt top companies for leaders in North America. Its restaurant brands – KFC, Pizza Hut and Taco Bell – are the global leaders of the chicken, pizza and Mexican-style food categories.
Since the company's spin-off from PepsiCo in 1997, Yum! Brands has become a global company going from approximately 20% of profits coming from outside the U.S. to almost 65% in 2015. Yum! Brands opens on average of over six new restaurants per day worldwide.
Yum! Brands has a market cap of $32.43 billion, a P/E ratio of 26.16, an enterprise value of $36.38 billion, a P/B ratio of 208.36 and a dividend yield of 2.23.
According to GuruFocus, Yum! Brands has an 8/10 financial strength rating and a 8/10 profitability and growth rating with an operating margin of 15.10%.
Mandel may have decided to purchase 1,512,569 shares of Yum Brands for the following reasons:
- Yum! Brands is a global leader in its industry with a market cap of $32.43 billion.
- The company has a Piotroski F-Score of 8, indicating a very healthy financial situation.
- The company is expanding globally, averaging over six new restaurants per day.
- The company generated over $13 billion in revenues in 2015.
- The company has drastically improved its financials over the previous 12 months with growth in EBITDA (25.80%), operating income growth (36.60%), EPS without NRI growth, (36.60%) and free cash flow growth (56.90%).
Below is a Peter Lynch Chart for Yum! Brands.
Mandel graduated from Dartmouth College in 1978, and later graduated with an MBA from Harvard University. Mandel has been managing hedge funds since 1990, when he was the manager of the Tiger Management hedge fund. He then left Tiger Management and formed his own hedge fund Lone Pine Capital in 1997. The firm was named after a pine tree that survived a lightning storm at Dartmouth.
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