Colonel Sanders Vs. General Tso
Investors who want a snapshot of the global economy should ignore Wall Street and the world’s central banks and instead focus on the lines at Kentucky Fried Chicken, Taco Bell and Pizza Hut, Cramer said.
All three are owned by Yum! Brands , which operates 35,000 restaurants in the U.S. and overseas in countries such as China and Russia. While the company, on of Cramer's Invest in America plays, reported a better-than-expected quarter on Oct. 8, the stock is trading at just 15 times earnings on analysts’ fears that a weakening China will hurt business.
Management disagrees, however, saying that any lack of profitability in that country is due to high chicken costs, a temporary problem rather than a permanent one. The Street, Cramer points out, is skeptical. And he’s wondering if further weakness is China will hurt the company.
So is General Tso about to outrank Colonel Sanders? Cramer invited Yum! Brands Chairman, CEO and President David Novak to find out. Watch the video to find out whether or not this stock’s a buy.
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