Do Hedge Funds and Insiders Love Yum! Brands, Inc. (NYSE:YUM)?

Yum! Brands, Inc. (NYSE:YUM) was in 31 hedge funds’ portfolio at the end of December. YUM shareholders have witnessed a decrease in support from the world’s most elite money managers lately. There were 35 hedge funds in our database with YUM positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are many methods shareholders can use to watch the equity markets. Two of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can trounce their index-focused peers by a healthy margin (see just how much).

Just as integral, positive insider trading sentiment is a second way to parse down the marketplace. There are a variety of reasons for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this method if shareholders understand what to do (learn more here).

With these “truths” under our belt, let’s take a look at the latest action surrounding Yum! Brands, Inc. (NYSE:YUM).

What does the smart money think about Yum! Brands, Inc. (NYSE:YUM)?

At the end of the fourth quarter, a total of 31 of the hedge funds we track held long positions in this stock, a change of -11% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes considerably.

Of the funds we track, Joho Capital, managed by Robert Karr, holds the most valuable position in Yum! Brands, Inc. (NYSE:YUM). Joho Capital has a $70 million position in the stock, comprising 9.3% of its 13F portfolio. On Joho Capital’s heels is Donald Chiboucis of Columbus Circle Investors, with a $70 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Richard Chilton’s Chilton Investment Company, Christopher R. Hansen’s Valiant Capital and Phill Gross and Robert Atchinson’s Adage Capital Management.

Seeing as Yum! Brands, Inc. (NYSE:YUM) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedgies who were dropping their entire stakes at the end of the year. Interestingly, Michael Karsch’s Karsch Capital Management dropped the largest position of the 450+ funds we monitor, totaling an estimated $11 million in stock.. Rob Citrone’s fund, Discovery Capital Management, also said goodbye to its stock, about $10 million worth. These transactions are interesting, as total hedge fund interest fell by 4 funds at the end of the year.

What do corporate executives and insiders think about Yum! Brands, Inc. (NYSE:YUM)?

Insider buying is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the last six-month time period, Yum! Brands, Inc. (NYSE:YUM) has experienced 1 unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

With the returns shown by our studies, retail investors must always monitor hedge fund and insider trading activity, and Yum! Brands, Inc. (NYSE:YUM) is no exception.

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