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Yum! Brands: Pros’ Trades After 9 Percent Drop

Following Yum! Brands' soft comps in China, CNBC "Fast Money" pros took positions on what to do with the stock Friday.


Following Yum! Brands' soft comps in China, CNBC "Fast Money" pros took positions on what to do with the stock Friday.

"I still like the fact they gave their full-year guidance the same as it had been, talking about their growth being 10 percent, not 14 percent as far as earnings per share," said OptionMonster.com's Pete Najarian.

Najarian said that Yum was making up for soft performance in China with strength in domestic sales.

"The valuations were too high. Now I think they're giving you an opportunity to get in," he added.

Stephen Weiss wasn't a buyer, pointing out the company's weak performance in China.

(Read More: Expect a 'Baby Grand Bargain': US Trust President)

"They were supposed to come in with a plus-2 percent comp, which for such a growing market, that's puny. They're growing more in the U.S.," he said. "Instead, comps were down 4 percent. That's a major, major change.

"I want to see what else is going on here before I step into the stock."

Joe Terranova of Virtus Investment Partners said that Yum was a bet on China.

"It has to do with a macro call on the Chinese economy," he said. "If you think that the Chinese economy has seen a trough, then you've got to buy Yum here, down 9 percent. That's what I believe."

Terranova said that strength in Asian currencies would continue to make the stock an emerging markets story.

OptionMonster.com's Jon Najarian noted that the stock was $66 back on Oct. 9.

"All it's done is round-trip it back to there," he said. "I'm looking to pick it up more like $62."

Najarian said the China story for Yum! Bronds was not about Taco Bell, but about KFC. "That's where they really hit the ground."

"I'd buy it below $66," he added.

Written by Bruno J. Navarro, CNBC.com Producer.

Trader disclosure: On Nov. 30, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Jon Najarian is long AAPL; Jon Najarian is long JPM; Jon Najarian is long FB; Jon Najarian is long GOOG; Jon Najarian is long TJX; Jon Najarian is long JCP; Jon Najarian is long EXPE; Jon Najarian is long MA; Jon Najarian is long YUM; Jon Najarian is long RGR; Jon Najarian is long GT; Jon Najarian is long STSI; Jon Najarian is long GLUU; Jon Najarian is long CME; Jon Najarian is long CBOE; Pete Najarian is long AAPL; Pete Najarian is long JPM; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Pete Najarian is long TCK; Pete Najarian is long MRK; Pete Najarian is long NOK; Pete Najarian is long LLY; Pete Najarian is long CE; Pete Najarian is long RHT CALLS; Pete Najarian is long VMW CALLS; Joe Terranova is long VRTS; Joe Terranova is long TJX; Joe Terranova is long AAPL; Joe Terranova is long YUM; Joe Terranova is long SWN; Joe Terranova is long GLW; Joe Terranova is long DELL; Joe Terranova is long VZ; Joe Terranova is long XOM; Steve Weiss is short JCP; Steve Weiss is long M; Steve Weiss is long T;

For Michael Pachter
FB/ZNGA:
1. WS makes a market in the securities of the subject company.
2. WS managed a public offering of securities within the last 12 months.
3. WS co-managed a public offering of securities within the last 12 months.
4. WS has received compensation for investment banking services within the last 12 months.
5. WS provided investment banking services within the last 12 months.
6. WS is acting as financial advisor.
7. WS expects to receive compensation for investment banking services within the next 3 months.
8. WS provided non-investment banking securities-related services within the past 12 months.
9. WS has received compensation for products and services other than investment banking services within the past 12 months.
10. The research analyst, a member of the research analyst's household, any associate of the research analyst, or any individual directly involved in the preparation of this report has a long position in the common stocks.
11. WS or one of its affiliates beneficially own 1% or more of the common equity securities.
12. The analyst maintains Contingent Value Rights that enables him/her to receive payments of cash upon the company's meeting certain clinical and regulatory milestones.

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