I published this article 2 month ago saying Yum! was a good stock to buy because of China. The stock was about 34 dollars when I published this article. I was right. I knew that only KFC and Pizza Huts would only be growing in China. I went to updown and wrote an article saying that Yum! would be growing somewhere around 10 percent or more in China. People just think my article was not well research and saying I don’t know anything.

The Business Model

Yum! have a well known brands such as KFC, Pizza Huts, Taco Bell, Long John Silvers, and A&W. Yum! is a diversify company because it sell chickens, pizza, and Mexican food, etc. KFC, Pizza Huts and Taco Bell are the only strong brands that I can think of for Yum!. The problems for Yum! in America is that it franchise stores are dirty and nasty depending on locations. I like to see Management bring motivation and productivity up in the U.S. Employees must have pride in their work for it sales to go up in America.

The Future for Yum!

I can only think one ways for Yum! to continue growing. Yum! must become a international business. Yum! must expand in China and India in order for it to grow. That is the only reason that I am going to buy Yum! share. Will expanding in China and India pay off? I don’t know. How long will it takes for Yum! business to pays off? I have 5 to 10 years ranges on it.

Summary

Don’t just buy Yum! because it expanding in China and India. Investors must also look at it balance sheet, cash flows, and long term debts. You must also know what new products Yum! have come up. Is the profit margin worth while? Does Yum! have outstanding labor and personnel relations?

These are some of the questions you must ask yourself. Don’t buy because I am writing this article about Yum!. You probably asking me am I betting on Yum!? The answer is yes. I am gambling on Yum! because it expanding in China and India. Don’t forget to ask how much you’re willing to pay.

First Published: February 27, 2008 @ 17:18