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In this article, I will feature one restaurant that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Yum! Brands (NYSE:YUM) operates quick service restaurants in the United States and internationally.

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Insider selling during the last 30 days

Here is a table of Yum! Brands' insider-trading activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Christain CampbellSVPFeb 1913,157Yes13,288 shares49.8%
Richard CarucciPresidentFeb 1378,048No34,098 shares69.6%
Patrick GrismerCFOFeb 51,770Yes17,840 shares + 8,316 options6.3%
Jonathan BlumSVPFeb 53,664Yes22,131 shares + 83,394 options3.4%

There have been 96,639 shares sold by insiders during the last 30 days. Christain Campbell, Patrick Grismer, and Jonathan Blum sold shares pursuant to a Rule 10b5-1 plan. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Yum! Brands' insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
February 201496,6390
January 20145,5910
December 2013447,0940
November 201394,6190
October 20139,23120,000
September 20136,9880
August 201313,6610
July 201310,3580
June 20136,9120
May 20139,5950
April 20132,8500
March 201393,4640
February 20133,24235,000
January 20133,2440

There have been 803,488 shares sold, and there have been 55,000 shares purchased by insiders since January 2013.

Financials

Yum! Brands reported the full-year 2013 financial results on February 3 with the following highlights:

Revenue$13.1 billion
Net income$1.1 billion
Cash$573 million
Debt$3.0 billion

YUM Revenue (<a href=

Yum! Brands' revenues peaked 12 months ago.

Outlook

Yum! Brands expects to deliver at least 20% EPS growth in 2014.

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(Source: Investor presentation)

Competition

Yum! Brands' competitors include Burger King Worldwide (NYSE:BKW), McDonald's (NYSE:MCD), and The Wendy's Company (NASDAQ:WEN). Here is a table comparing these companies.

CompanyYUMBKWMCDWEN
Market Cap:32.27B9.20B95.97B3.88B
Employees:75,460N/AN/A44,000
Qtrly Rev Growth (yoy):0.01-0.340.020.01
Revenue:13.08B1.15B28.11B2.52B
Gross Margin:0.260.700.390.26
EBITDA:2.75B642.60M10.09B361.88M
Operating Margin:0.160.500.300.08
Net Income:1.09B233.70M5.59B37.83M
EPS:2.360.655.550.10
P/E:30.8740.2517.38104.21
PEG (5 yr expected):1.631.751.971.47
P/S:2.478.003.391.52

Yum! Brands, together with Wendy's, has the lowest gross margin among these four companies.

Here is a table of these competitors' insider activities during the last 30 days.

CompanyInsider buying / sharesInsider selling / shares
BKWN/AN/A
MCD055,110
WEN0210,986

McDonald's has also seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling Yum! Brands, and there have not been any insiders buying Yum! Brands during the last 30 days. Two of these four insiders decreased their holdings by more than 10%. Yum! Brands has an insider ownership of 0.20%.

Yum! Brands has a $55 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $55 price target. I would place a stop loss at $78, which is the all-time high. The three main reasons for the proposed short entry are negative year-over-year revenue growth, bearish Point and Figure chart, and the intensive insider-selling activity.

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Source: Yum! Brands: 4 Different Insiders Have Sold Shares This Month