Yum China Holdings Chief Technology Officer Makes $133K Stock Purchase

Disclosed in the latest SEC filing, a significant insider purchase on August 15, involves Leila Zhang, Chief Technology Officer at Yum China Holdings YUMC.

What Happened: In a Form 4 filing on Thursday with the U.S. Securities and Exchange Commission, it was disclosed that Zhang bought 4,000 shares of Yum China Holdings, amounting to a total of $133,429.

At Thursday morning, Yum China Holdings shares are up by 1.14%, trading at $33.58.

Get to Know Yum China Holdings Better

With almost 13,000 units and USD 10 billion in systemwide sales in 2022, Yum China is the largest restaurant chain in China. It generates revenue through its own restaurants and franchise fees. Key concepts include KFC (9,094 units) and Pizza Hut (2,903), but the company's portfolio also includes other brands such as Little Sheep, East Dawning, Taco Bell, Huang Ji Huang, COFFii & Joy, and Lavazza (collectively representing about 950 units). Yum China is a trademark licensee of Yum Brands, paying 3% of total systemwide sales to the company it separated from in October 2016.

Yum China Holdings's Economic Impact: An Analysis

Revenue Growth: Over the 3 months period, Yum China Holdings showcased positive performance, achieving a revenue growth rate of 0.94% as of 30 June, 2024. This reflects a substantial increase in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Discretionary sector.

Profitability Metrics:

• Gross Margin: The company shows a low gross margin of 16.46%, indicating concerns regarding cost management and overall profitability relative to its industry counterparts.

• Earnings per Share (EPS): Yum China Holdings's EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 0.55.

Debt Management: Yum China Holdings's debt-to-equity ratio is below the industry average at 0.47, reflecting a lower dependency on debt financing and a more conservative financial approach.

Understanding Financial Valuation:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 15.96 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The current P/S ratio of 1.22 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry benchmarks at 8.35, Yum China Holdings presents an attractive value opportunity.

Market Capitalization: Boasting an elevated market capitalization, the company surpasses industry averages. This signals substantial size and strong market recognition.

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

Navigating the Impact of Insider Transactions on Investments

Insightful as they may be, insider transactions should be considered alongside a thorough examination of other investment criteria.

Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

The Insider's Guide to Important Transaction Codes

Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Yum China Holdings's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.