Yum! Brands, Inc. (Public, NYSE:YUM) – Clock That Stock

Clock_That_Stock

The Stock

After reporting yesterday on another player in the restaurant space, Darden Restaurants (NYSE:DRI), Yum! Brands, Inc. (Public, NYSE:YUM) has witnessed an upgrade of its stock from “Neutral” to “Buy” and had its price target raised from $38 to $44. The stock has rallied almost 4% on the day as a result. Darden Restaurants is also witnessing an appreciation in their stock price by over 1%.

This company has a decent history of beating expectations as it pertains to earnings. Fundamental targets based upon future earnings growth places this stock at $44.50, providing justification to the upgrade provided by UBS. The stock has a 2.29% dividend yield at present level, enough to at least cover the commissions to make a play in this equity. Financial results are solid for this company, leaving its growth prospects intact.

Market sentiment of equities using option contract volume is painting an overly bullish picture of the markets at mid-day today, with 0.46 puts purchased for each call. This stock is more bearish than this stat at 0.82 puts for each call trading hands today on current month contracts. The open interest put/call ratio for the stock rests at 0.63. Investors are adding a bearish overtone to the optimistic news, beginning to bet more to the downside in case the run-up witnessed as of recent is too significant. The stock is currently trading well above its expected range as it forms a new trend.

Chart Courtesy of StockCharts.com

The Clock

This equity shows strong seasonal strengths directly around this period, the start of which is currently well under way. This stock averages over 11% gains between now and the end of April.

Yum! Brands, Inc. (YUM) 35.41

+ 0.54 (1.55%)

Seasonality Analysis

Analysis has revealed that with a buy date of July 27 and a sell date of June 1, investors have benefited from a total return of 543.48% over the last 10 years. This scenario has shown positive results in 7 of those periods.

Conversely, the best return over the maximum number of positive periods reveals a buy date of February 10 and a sell date of June 1, producing a total return over the same 10-year range of 339.75% with positive results in 10 of those periods.

The buy and hold return for the past 10 years was 294.22%.

Technical Analysis

Support 2

Support 1

Pivot Point

Resistance1

Resistance2

The Numbers

34.73

35.07

35.36

35.70

35.99

Most Recent Close:

35.41

Support/Resistance Analys

Broke Lwr Resistance (1)

52-Week High:

36.96

MACD Analysis:

Bullish Centreline Cross

52-Week Low:

22.92

MACD vs. Signal:

Above/Widening

Fib. Retracement:

~ 78.6%

RSI Analysis:

Bullish

50-Day MA:

34.44

Stochastic (Fast) Analysis:

Overbought and Declini

200-Day MA:

34.26

50 vs 200-Day MA Analysis:

50-day Above 200-Day MA

High Critical Level:

35.08

Year over Year Trend:

Strongly Gaining

Low Critical Value:

33.16

Critical Level Analysis:

Broke Above Previous Tren

Average Monthly Gain:

4.5%

MFI Analysis

Above 50 Advancing

Technical Rating:

Candlestick Analysis

Bullish

On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels.

Situational Analysis

Past Year

Advancing Sessions %

Return %

10-Year Average

Advancing Sessions %

Return %

Mar 8 thru Apr 7

54.5

18.2

Mar 8 thru Apr 7

5.3

Best Return: 23.8% – Sell Apr 3

Best Return: 8.9% – Sell Mar 24

Mar 8 thru Jun 6

52.4

46.9

Mar 8 thru Jun 6

52.8

13.6

Best Return: 50.5% – Sell Jun 3

Best Return: 19.4% – Sell May 12

Mar 8 thru Sep 4

51.2

40.6

Mar 8 thru Sep 4

49.8

11.4

Best Return: 51% – Sell Aug 5

Best Return: 21.4% – Sell Jun 26

Following Earnings Releases – Last 12 Periods

During Equivalent Periods of Economic Recovery where Unemployment has Peaked

12-Period Average

Advancing Sessions %

Return %

1-Period (2003 Economic Rebound)

Advancing Sessions %

Return %

30 Days After

50.4

-0.6

Sep 1 thru Nov 30

57.1

16.4

Best Return: 6% – After 18 Days on Average

Best Return: 17% – Sell Nov 13

60 Days After

1.9

Sep 1 thru Feb 28

51.6

Best Return: 7.2% – After 33 Days on Average

Best Return: 25% – Sell Feb 26

90 Days After

4.6

Sep 1 thru Aug 26

49.8

34.5

Best Return: 11.5% – After 60 Days on Average

Best Return: 34.5% – Sell Aug 26

Further Analysis

Sector:

Services

Industry:

Restaurants

According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Consumer Discretionary Sector ranges from October 28th through to April 22nd. Corresponding to the seasonality of the broad market, this sector finds strength from consumers buying/upgrading large ticket items (cars, homes, etc.) during late winter & early spring, and of course let’s not forget the holiday buying season. This sector peaks just before equity markets top out in May.

Current Consensus Recommend:

Outperform

Recommendation 1-Month Ago:

Outperform

Recommendation 3-Months Ago:

Outperform

Disclaimer

Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.