Best of StockTwits: $YUM should be $YUCKJune 8, 2012: 2:53 PM ET
Fast food. Slow economy. Europe and China are starting to hurt McDonald's (MCD). And the fears of a China pullback have really weighed on Yum (YUM), whose KFC brand is huge in China. Still, some traders are still bullish on Happy Meals and the Colonel's Crispy Strips.
That is astonishing. I know that Germans are anti-bailout. But anti-burgers too? Seriously though, if the McDonald's weakness in Germany is a sign that consumers in the strongest economy in Europe are starting to pull back on spending, then that is not a good sign for Europe, the U.S. or the rest of the world.
Maybe another Chinese rate cut will get consumers to head back to the Golden Arches? China was supposed to be the great growth story for Mickey D's and Yum. It is awful news if that is no longer the case.
The Golden Arches are the better bargain for value investors. Has that 3.2% yield too. But Yum is down more than 10% in the past month and may also be getting attractive as long as you believe that China's slowdown is a hiccup and not part of a bigger trend. Yum is trading at less than 20 times earnings estimates and its yield is a finger licking good 1.7%.
Finally, Facebook (FB) has enjoyed a nice rally Friday. I even profiled two fund managers Thursday who are still bullish on the stock. But many investors are rightfully still skeptical, including a guy who simply refers to himself as "Joe" on Twitter. Hey Joe. Where you going with my reader comment of the week award in your hand!
Well-played. Looks like starting too closely at the Facebook IPO is bad for your eyes as well. Maybe the company should start selling special filters. New revenue stream!