Sam Collins

Enjoy Yum! Brands Profits Now and Later

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Yum! Brands (YUM) --This operator of quick-service restaurants, which includes KFC, Pizza Hut, Taco Bell, Long John Silver's and A&W, held its powerful bull-market trend through almost all of this year's bear market.

On Oct.14, the Trade of the Day said, "But recently it finally cracked in an irrational round of selling. This stock appears to have turned from a low which marks a long-term double bottom and could provide investors with an opportunity to position this quality performer for a long-term hold."

That comment was followed by a sharp move higher and then a pullback to less than $24 where our internal indicator, the Collins-Bollinger Reversal (CBR), flashed another buy signal and the stock responded with a one-month rally from less than $21 to more than $33.

Now the stochastic has given a buy signal for YUM and so has the CBR. Look for a trading rally to $34 but long-term buyers may want to add YUM to their portfolios now for the outstanding growth that it has exhibited in the past.

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Sam Collins is a registered, fee-based portfolio manager who may be contacted samailc@cox.net. You can also check out an archive of some of his most recent market outlooks by clicking here.