Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Yum! Brands, Inc. (NYSE:YUM) based on that data.
Is Yum! Brands, Inc. (NYSE:YUM) undervalued? Money managers were taking a bullish view. The number of bullish hedge fund positions rose by 3 in recent months. Yum! Brands, Inc. (NYSE:YUM) was in 38 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 65. Our calculations also showed that YUM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a look at the fresh hedge fund action regarding Yum! Brands, Inc. (NYSE:YUM).
Andrew Sandler of Sandler Capital Management
Do Hedge Funds Think YUM Is A Good Stock To Buy Now?
At the end of September, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the second quarter of 2021. By comparison, 42 hedge funds held shares or bullish call options in YUM a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Panayotis Takis Sparaggis’s Alkeon Capital Management has the number one position in Yum! Brands, Inc. (NYSE:YUM), worth close to $282.5 million, amounting to 0.5% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, holding a $108.9 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism contain Ray Dalio’s Bridgewater Associates, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Masterton Capital Management allocated the biggest weight to Yum! Brands, Inc. (NYSE:YUM), around 3.13% of its 13F portfolio. TwinBeech Capital is also relatively very bullish on the stock, designating 1.15 percent of its 13F equity portfolio to YUM.
Now, specific money managers were breaking ground themselves. Segantii Capital, managed by Simon Sadler, assembled the most valuable position in Yum! Brands, Inc. (NYSE:YUM). Segantii Capital had $17.1 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $11 million investment in the stock during the quarter. The following funds were also among the new YUM investors: Paul Tudor Jones’s Tudor Investment Corp, Michael Gelband’s ExodusPoint Capital, and Andrew Sandler’s Sandler Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Yum! Brands, Inc. (NYSE:YUM) but similarly valued. We will take a look at Cloudflare, Inc. (NYSE:NET), Mizuho Financial Group Inc. (NYSE:MFG), Robinhood Markets Inc. (NASDAQ:HOOD), Parker-Hannifin Corporation (NYSE:PH), AutoZone, Inc. (NYSE:AZO), Unity Software Inc. (NYSE:U), and DuPont de Nemours Inc (NYSE:DD). This group of stocks’ market caps match YUM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NET | 50 | 958432 | 7 |
| MFG | 6 | 13164 | 0 |
| HOOD | 20 | 4685841 | 20 |
| PH | 39 | 1973795 | -3 |
| AZO | 35 | 1020383 | 1 |
| U | 36 | 7901507 | 7 |
| DD | 51 | 1498457 | -6 |
| Average | 33.9 | 2578797 | 3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.9 hedge funds with bullish positions and the average amount invested in these stocks was $2579 million. That figure was $758 million in YUM’s case. DuPont de Nemours Inc (NYSE:DD) is the most popular stock in this table. On the other hand Mizuho Financial Group Inc. (NYSE:MFG) is the least popular one with only 6 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. Our overall hedge fund sentiment score for YUM is 61.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately YUM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on YUM were disappointed as the stock returned 0.8% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
