Yum! Brands, Inc. (YUM)’s Richest Investors Are Making These Moves

Yum! Brands, Inc. (NYSE:YUM) was in 34 hedge funds’ portfolio at the end of the first quarter of 2013. YUM shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late. There were 34 hedge funds in our database with YUM positions at the end of the previous quarter.

According to most shareholders, hedge funds are perceived as worthless, outdated investment vehicles of the past. While there are more than 8000 funds trading today, we look at the leaders of this group, close to 450 funds. It is widely believed that this group has its hands on the lion’s share of all hedge funds’ total capital, and by paying attention to their top investments, we have found a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as beneficial, positive insider trading activity is a second way to break down the stock market universe. As the old adage goes: there are a variety of incentives for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this strategy if shareholders understand what to do (learn more here).

With all of this in mind, we’re going to take a look at the recent action regarding Yum! Brands, Inc. (NYSE:YUM).

Hedge fund activity in 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 previous quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably.

Yum! Brands, Inc. (NYSE:YUM)When looking at the hedgies we track, J Kevin Kenny Jr’s Emerging Sovereign Group had the biggest position in Yum! Brands, Inc. (NYSE:YUM), worth close to $141.8 million, comprising 8.5% of its total 13F portfolio. The second largest stake is held by Farallon Capital, managed by Andrew Spokes, which held a $81.7 million position; 1.7% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Tony Chedraoui’s Tyrus Capital, Richard Chilton’s Chilton Investment Company and Phill Gross and Robert Atchinson’s Adage Capital Management.

Since Yum! Brands, Inc. (NYSE:YUM) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few hedgies that decided to sell off their entire stakes last quarter. Intriguingly, Robert Karr’s Joho Capital dumped the biggest investment of the 450+ funds we key on, worth an estimated $70.5 million in stock.. Clifford G. Fox’s fund, Columbus Circle Investors, also sold off its stock, about $70.2 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Yum! Brands, Inc. (NYSE:YUM)?

Bullish insider trading is most useful when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, Yum! Brands, Inc. (NYSE:YUM) has experienced 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

With the results exhibited by the aforementioned tactics, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Yum! Brands, Inc. (NYSE:YUM) applies perfectly to this mantra.

Click here to learn why you should track hedge funds

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