Is Yum! Brands, Inc. (YUM) a Sell?

Is Yum! Brands, Inc. (NYSE:YUM) going to take off soon? Money managers are taking a pessimistic view. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience.

In the 21st century investor’s toolkit, there are plenty of indicators shareholders can use to track Mr. Market. A couple of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can beat their index-focused peers by a healthy margin (see just how much).

Just as key, optimistic insider trading sentiment is another way to parse down the world of equities. Obviously, there are lots of reasons for a corporate insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this strategy if you understand where to look (learn more here).

With all of this in mind, it’s important to take a look at the latest action surrounding Yum! Brands, Inc. (NYSE:YUM).

How have hedgies been trading Yum! Brands, Inc. (NYSE:YUM)?

At the end of the first quarter, a total of 34 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter.

Judging by the fact that Yum! Brands, Inc. (NYSE:YUM) has witnessed declining sentiment from hedge fund managers (stagnancy is negative), logic holds that there exists a select few fund managers that decided to sell off their full holdings at the end of the first quarter. Interestingly, Robert Karr’s Joho Capital dumped the largest position of the “upper crust” of funds we watch, comprising an estimated $70.5 million in stock., and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund cut about $70.2 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

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

Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past 180 days. Over the last six-month time frame, Yum! Brands, Inc. (NYSE:YUM) has experienced 1 unique insiders buying, and 10 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Yum! Brands, Inc. (NYSE:YUM). These stocks are Darden Restaurants, Inc. (NYSE:DRI), Burger King Worldwide Inc (NYSE:BKW), Tim Hortons Inc. (USA) (NYSE:THI), Chipotle Mexican Grill, Inc. (NYSE:CMG), and McDonald’s Corporation (NYSE:MCD). All of these stocks are in the restaurants industry and their market caps are similar to YUM’s market cap.