Friday proved to be a good day for Yum! Brands, Inc. (NYSE:YUM) as its shared surged 5% in intraday trading. As per the reports, this hike was noticed after the Third Point hedge fund of Daniel Loeb acquired a significant stake in Yum.
Road So Far:
Daniel Loeb is one of the renowned billionaires in the world. As soon as he bought a stake in Yum, the shares of world’s second largest quick-service company touched $91.15 level. The last few months have not been good for the company, especially in China. As per the reports, the owner company of some of the most renowned fast food brands such as KFC, Pizza Hut and Taco Bell has witnessed a tough time in China lately. It is due to a few incidents related to the supplier- food safety.
Even after this kind of performance, Third Point states that Yum is turning the difficult times into opportunities and will start making the beyond compare profit in the next few years. In a letter sent to investors, Third Point stated that it had initiated the talks of investment in the first quarter after taking a look at Yum’s recent performance. According to it, the company had started turning things around in the first quarter and would continue to do so in the future as well.
Reporters tried to contact Third Point to know about the exact stake that it had acquired in Yum, but the companies denied disclosing the percentage. Last week, Yum disclosed its quarterly results and outperformed Wall Street forecasts. However, its revenues plunged as the sales in the Chinese market were down 12% in the previous quarter. The Same store sales of the company’s Taco Bell and Kentucky Fried Chicken divisions grew 6% and 5% respectively.
The senior management of Yum is delighted to have Third Point on board.
