Is Yum! Brands, Inc. (YUM) A Good Stock To Buy?

Because Yum! Brands, Inc. (NYSE:YUM) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there exists a select few money managers that decided to sell off their full holdings in the third quarter. Intriguingly, James Crichton’s Hitchwood Capital Management dumped the biggest position of the 700 funds tracked by Insider Monkey, worth an estimated $91.2 million in stock. John Burbank’s fund, Passport Capital, also sold off its stock, about $33.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Yum! Brands, Inc. (NYSE:YUM). These stocks are Estee Lauder Companies Inc (NYSE:EL), Emerson Electric Co. (NYSE:EMR), Charles Schwab Corp (NYSE:SCHW), and Korea Electric Power Corporation (ADR) (NYSE:KEP). This group of stocks’ market values are similar to YUM’s market value.

As you can see these stocks had an average of 28.75 hedge funds with bullish positions and the average amount invested in these stocks was $990 million. That figure was $4.02 billion in YUM’s case. Charles Schwab Corp (NYSE:SCHW) is the most popular stock in this table. On the other hand Korea Electric Power Corporation (ADR) (NYSE:KEP) is the least popular one with only 14 bullish hedge fund positions. Yum! Brands, Inc. (NYSE:YUM) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SCHW might be a better candidate to consider a long position.