Short Candidate: YUM

by professorpuddle

Hey all. With all the commotion on this forum, I wanted to make a post on which this forum was actually founded on: picking stocks. That’s right, this forum was originally created on sharing analyses of stocks and such strategies. Here’s my homework:

– Their revenues have declined by -16.02%/year (geometric average) in the last 5 years.

– They are ramping up long-term debt like crazy, you might think it’s not a big deal but this impacts the free-cash flow to equity (FCFE). FCFE averaged -3.3/share in each of the last 5 years which is terrible!

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– They are increasing their dividend every year giving the illusion that everything is fine but it’s masking that it’s a sinking ship.

– P/E ratio is around 27 but the industry median is only 16.

– Current Price: 99 / Price target: 79 (-20% drop)

 

Disclaimer: Consult your financial professional before making any investment decision.

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