Yum! Brands, Inc. (YUM) Beats On Q2 Bottom Line Despite Declines: Was Activist Keith Meister Right?

Hedge fund activity in Yum! Brands, Inc. (NYSE:YUM)

Heading into the second quarter, a total of 45 of the hedge funds tracked by Insider Monkey were bullish in this stock, an increase of seven from the close of the fourth quarter.

When looking at the hedgies followed by Insider Monkey, Third Point, managed by Dan Loeb, held the largest position in Yum! Brands, Inc. (NYSE:YUM) at the end of the first quarter. Third Point had a $259.8 million position in the stock made up of 3.3 million shares, comprising 2.4% of its 13F portfolio. Sitting in the number two spot was Emerging Sovereign Group, managed by J Kevin Kenny Jr., which held a $247.2 million position of 3.14 million shares; the fund had 8.8% of its 13F portfolio invested in the stock. Some other hedge funds that were bullish contain Doug Silverman and Alexander Klabin’s Senator Investment Group, and Keith Meister’s Corvex Capital. It should be noted, however, that since Meister has revealed that Corvex owns about $1.5 billion worth of Yum shares as of May, his hedge fund is now the largest shareholder of the firm among hedge funds we track based on the available data.

As one would reasonably expect, key hedge funds have jumped into Yum! Brands, Inc. (NYSE:YUM) headfirst. The aforementioned Third Point established its Yum! Brands, Inc. (NYSE:YUM) position entirely in the first quarter, as did the aforementioned Emerging Sovereign Group and Corvex Capital. Other funds which had new Yum positions are Benjamin A. Smith’s Laurion Capital Management, which bought 587,945 shares worth about $46.28 million, and Barry Rosenstein’s JANA Partners.

The very bullish sentiment, particularly from Corvex Capital and Keith Meister, as well as the beat for the second quarter, which may be evidence of the company having weathered the crises it was subjected to in China recently, make us think a long position on Yum! Brands, Inc. (NYSE:YUM) is a good position at the moment. Corvex’s position in the company is also likely to put pressure on the fast food giant to separate its China business or greatly improve its performance in the country, which would unlock further value.

Disclosure: None