Yum! Brands, Inc.
Thesis
Yum! Brands is undervalued due to its suboptimal operating structure. A spinoff of its domestic operations from its high-growth international business would allow investors to better define their risk tolerance and could reverse an estimated 25% discount on the combined entity. The spinoff would also drive increased management discipline, improving operational efficiencies and growth potential.
Did it work?
The long thesis on Yum! Brands has played out successfully, as evidenced by a 134.3% increase in stock price over 172 months. The anticipated spinoff of its domestic operations has likely contributed to this performance by allowing investors to better assess risk and enhancing operational efficiencies. The significant price appreciation aligns with the thesis of unlocking value through structural changes.
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