Yum! Brands, Inc. (YUM) Continues Hot Streak Amid M&A Buzz

Yum! Brands, Inc. (YUM) is reportedly in talks with KKR & Co. L.P. (KKR) over the restaurant operator's China business

Mar 23, 2016 at 2:21 PM
facebook X logo linkedin


Yum! Brands, Inc. (NYSE:YUM) is getting a boost today, following reports the Pizza Hut parent is in talks with KKR & Co. L.P. (NYSE:KKR) about selling a nearly 20% stake in its China business. At last check, YUM is 1.8% higher at $80.40 -- approaching a six-month peak -- and has rallied 24.5% since its two-year low of $64.58 on Feb. 11. However, sentiment is pretty negative toward the stock, both inside and outside of its options pits.

For starters, YUM has amassed a put/call volume ratio of 0.97 during the past 50 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). While this reading indicates long calls edge out puts on an absolute basis, it ranks in the bearishly skewed 86th percentile of its annual range. In other words, option traders have been buying to open YUM puts over calls at a much quicker-than-usual clip.

Elsewhere, the majority of brokerage firms don't think much of the stock. Specifically, nine of 16 analysts rate YUM a lukewarm "hold." Plus, the average 12-month price target of $84.60 is just a chip-shot away from the shares' current perch. Should option traders or analysts abandon the bears' camp, YUM could enjoy additional tailwinds.

By contrast, short sellers have been staging a mass exodus from Yum! Brands, Inc. (NYSE:YUM) amid its recent technical tear. During the most recent reporting period, short interest plummeted 33.5%. Now, a slim 2.4% of YUM's float is sold short, which would take just two days to cover, at the stock's typical trading levels.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI