I want to thank Joe Cornell from Spin-off Research for his recommendation on Yum China (YUMC). My only regret is that I did a smaller position than usual, due to the lack of experience with the source of information.
YUMC was a missed opportunity for me. When I looked at it last year, it came up as fairly value. Reviewing my model today, I realized I was using the wrong beta. Duh! Otherwise, it would have shown 25% upside.
Anyway, after updating the financials, I come up with a fair value of $46. It looks like the stock is already discounting the problems at Pizza Hut.
My concern now is whether I want more exposure to China and the restaurant space since I already have a position in Starbucks.