Are Yum Brands Executives Selling Stock On Insider Knowledge?
It looks like executives at Yum! Brands, Inc. (NYSE:YUM), the parent company of fast food chains Taco Bell, KFC and Pizza Hut, may be privy to insider information, given the sizzling insider trading activity that has been going on in the last few months.
The company recently announced that its profits came in lower than many had anticipated due to problems in China - its most important foreign market - but that the slump would not persist.
According to The Associated Press, operating profit in China fell 4 percent in the second quarter compared with the first, which was caused by higher commodity and labor costs as well as higher start-up costs for the huge amount of new stores that have opened in the country.
"We expect this to be short lived as our menu initiatives, including pricing, begin to take hold and inflation moderates," Yum Chairman and CEO David C. Novak said during a conference call.
But this optimism doesn't show through in the company's insider trading reports. On July 2, Taco Bell CEO Greg Creed exercised his market option for 11,040 shares valued at $29.61 each, then sold those shares for a total of $203,610.
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