Cramer Indulges on Yum! Brands (YUM) Stock
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Price: $161.68 --0%
Rating Summary:
19 Buy, 23 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 19 | New: 6
Rating Summary:
19 Buy, 23 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 19 | New: 6
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Yesterday on Mad Money, Jim Cramer interviewed Yum! Brands (NYSE: YUM) CEO, David Novak. Cramer, chewing on a piece of KFC chicken, introduced the CEO by calling Yum! "the most pro-shareholder, growth oriented services company" he knows of.
Cramer loves Yum! for its global strong position, especially in China, which he called one of the best growth stories ever. Mr. Novak told Cramer that Kentucky Fried Chicken and Pizza Hut are gaining market share in China's restaurant industry and points out that Yum! opened 100 restaurants in December alone, or about 3 a day. Furthermore, throughout all of 2007, Yum!'s CEO told viewers of Mad Money that the Company opened one restaurant a day, on average. Yum! currently has about 2,100 KFC's and only about 350 Pizza Huts in China, but with more than 250 million people among the country's middle class, Novak said they are still standing at the ground floor.
Discussing how the 2008 Olympics could affect Yum!'s performance, Mr. Novak called his Company's operations in China probably "the best of any retailer in the world."
Moving to other important emerging markets, Cramer next had Mr. Novak talk about Yum!'s operations in Russia and India. The CEO told Cramer that Yum! currently has few locations in both countries, meaning that these areas have the biggest potential and room to grow.
Coming full-circle, as Cramer put it, the President of Cramerica next questioned Yum!'s CEO about the Company's domestic operations. Cramer asked Mr. Novak how Yum! was so efficient at containing food inflation and Mr. Novak responded by pointing out that Yum! has half its operations outside of the U.S.
The Yum! segment concluded by Mr. Novak telling Mad Money watchers that the Company has continued to grow domestic EPS at a 10% rate over the last six years, despite a very tough macro environment. Novak said Yum! will attempt to continue driving earnings at a consistent rate by managing asset and sales leverage through a focus on introducing new categories on its menus, such as desserts and beverages that are healthier.
Cramer loves Yum! for its global strong position, especially in China, which he called one of the best growth stories ever. Mr. Novak told Cramer that Kentucky Fried Chicken and Pizza Hut are gaining market share in China's restaurant industry and points out that Yum! opened 100 restaurants in December alone, or about 3 a day. Furthermore, throughout all of 2007, Yum!'s CEO told viewers of Mad Money that the Company opened one restaurant a day, on average. Yum! currently has about 2,100 KFC's and only about 350 Pizza Huts in China, but with more than 250 million people among the country's middle class, Novak said they are still standing at the ground floor.
Discussing how the 2008 Olympics could affect Yum!'s performance, Mr. Novak called his Company's operations in China probably "the best of any retailer in the world."
Moving to other important emerging markets, Cramer next had Mr. Novak talk about Yum!'s operations in Russia and India. The CEO told Cramer that Yum! currently has few locations in both countries, meaning that these areas have the biggest potential and room to grow.
Coming full-circle, as Cramer put it, the President of Cramerica next questioned Yum!'s CEO about the Company's domestic operations. Cramer asked Mr. Novak how Yum! was so efficient at containing food inflation and Mr. Novak responded by pointing out that Yum! has half its operations outside of the U.S.
The Yum! segment concluded by Mr. Novak telling Mad Money watchers that the Company has continued to grow domestic EPS at a 10% rate over the last six years, despite a very tough macro environment. Novak said Yum! will attempt to continue driving earnings at a consistent rate by managing asset and sales leverage through a focus on introducing new categories on its menus, such as desserts and beverages that are healthier.
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