Yum China Holdings, Inc. $YUMC
1. Is the company undervalued?
EV/EBIT: 23.2
EV/Sales: 1.83
Price/Book: 2.62

Yum China is a strong franchise with attractive unit economics and a long runway for growth. Unfortunately, investors have to pay a premium today in order to participate in that growth. Moreover China’s strict Covid policies will likely be a drag on margins and expansion efforts near term. Nonetheless investors could still achieve satisfactory returns, as the stock isn’t priced for perfection.

Link to full writeup here:
Weekly market review (week/YTD)
$SPY -2.19%/-7.83%
$QQQ -3.07%/-14.94%
$VTV -1.02%/+0.64%
$VUG -3.12%/-15.79%
$ARKK -2.74%/-37.64%
Portfolio -2.57%/-10.71%

The market is down this week and struggling with recent technical resistance.

$VTV is having its time in the sun this year, caused by insecurity in the markets. Near ATH, but still has a nice 2.14% forward dividend yield. However, historically value underperforms $SPY over the long-term, so this is a deviation. Would not recommend buying right now.

My portfolio is performing in-line with the market. Unfortunately, I have a few companies that drag down performance and that I wouldn’t buy anymore given stricter investing criteria. These are $PINS, $YUMC, $BABA and partly $BA. Only quality investing from this point on.

Quite a few companies on my selection of high quality companies are below my intrinsic value and at or below my buy points. No buys recently because I already have allocations. However, if the market continues going down, there might be a chance to get cheap shares again.

Check out my eToro portfolio to follow all my investments:
Big Week Ahead! (Oct 25-29 Earnings Calendar)
Next week will probably be the most interesting week for the stock market this quarter. The largest companies in the world are all reporting and we'll get a lot of very valuable insights.

Here's what I'm interested in:
  • More context on the slowdown in ad spending from $FB $GOOG and $TWTR. Let's see if these companies are experiencing similar issues to the ones $SNAP mentioned yesterday.
  • Comments on the global supply chain issues from $KMB $MMM $GLW $LOGI and others.
  • A general update from $AMD $TDOC $SHOP and$AMZN.
  • Perspectives on the energy market from $XOM $CVX

Comment below what earnings call you're looking forward to!

Remember you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.





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