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Bullish catalyst coming for Yum?

The parent company of KFC had been struggling of late. Is the worst over?

Back in October, investors ran for the exits after Yum! cut its full year earnings forecast and said profit fell 68% for the third quarter, in part, due to weakness in China.

"For a long time it looked like Yum! was taking China, their largest market, by storm, but then the Chinese economy started slowing and the company really took it on the chin, exacerbated by some health scares and super bad publicity related to the chicken used in KFC," Cramer explained.

Overseas weakness is a big issue for Yum; the company gets about three-quarters of its revenue from outside the U.S.

Developments spooked investors so badly, shares fell almost 10% in a single session.



A KFC restaurant in Beijing
Bernardo De Niz | Bloomberg | Getty Images
A KFC restaurant in Beijing

However, when investors run for cover, sometimes they throw out the baby with the proverbial bathwater. That is, sometimes a stock becomes oversold.

Cramer can't help but wonder if that's the case right now, after Yum! released new same store sales data.

"The data was much better than the Street had feared, although sales were down 5%," Cramer noted. "And gains at Pizza Hut helped mitigate some of the losses."

The relative improvement may be a reason to give the stock a second look.

However, that's not the only reason.

The Mad Money host also believes that despite near-term weakness, China is slowly starting to turn and that over the long-run, the economy will again percolate. Considering China accounts for about 40 percent of Yum's operating profits the parent of KFC, Pizza Hut and Taco Bell may be well positioned for the long run

But that's not all.

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"This is a very well-run company with fabulous management," Cramer added.

All told Cramer sees every reason for optimism. "I would not be at all surprised to hear good things at their upcoming analyst meeting on December 4th," he said.

After so much woe, could that be the catalyst bulls have longed for? Cramer can't help but wonder.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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