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No. of Recommendations: 5
So I'm now out of YUM. The stock is up more than 80% since the spinoff in late 2016, and it's had a rather good 2019, even a great month now. By my math, the stock is pricing in 2020's earnings growth (assuming earnings growth of about 15%, which is in line with sell-side estimates). At Yum's typical multiple of about 25x earnings, that fair price would be about $108. I think it's gotten ahead of itself, and while I otherwise would be inclined to hold on, I've been liquidating positions while the market is strong and in my expectation of a recession in the not-too-distant future.

Again, I think YUM is still a multi-decade story, but I think the market will get a lot rougher over the next 12-18 months. Nevertheless, this sell may wind up being too cute... YMMV


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