Third Point, the hedge fund headed by Daniel Loeb reduced its stake in Yum! Brands, Inc. (NYSE:YUM), the parent company of Taco Bell, Pizza Hut, and Kentucky Fried Chicken, by almost $1 billion in the fourth quarter of 2015.
Based on its 13F filing with the Securities and Exchange Commission (SEC), Third Point sold 11, 524,700 shares of Yum! Brands worth approximately $921.9 million. The company still owns 75, 300 shares with a market value of around $5.5 million.
Yum! Brands on track to separating its China Division
In October, the restaurant operator announced its intention to separate its China Division into an independent, publicly-traded company. Yum! Brands also appointed activist investor Keith Meister to its Board of Directors. Yum! Brands reported that its China Division’s same-store sales climbed 2% for the fourth quarter.
Last week, the restaurant operator reported fourth-quarter earnings of $0.63 per share and total revenues of $3.95 billion.
Yum! Brands CEO Greg Creed, stated, “2016 will be a transformational year” for the company citing the reason that it is no track to completing the spin-off of its China Division. He added, “We are 100% dedicated to building and strengthening KFC, Pizza Hut and Taco Bell all around the world, as strong brands are critical to delivering sustained growth and creating shareholder value over the long term.”
The restaurant operator also announced that David Russell, its Corporate Comptroller will serve as interim CFO. He will take over the responsibilities of Patrick Grismer, who will be resigning as CFO on February 19.
Loeb took a more defensive approach
Mr. Loeb informed clients that Third Point took a more defensive approach in investing by increasing its bets amid the market volatility. According to him, his form avoided “calamitous” losses last year.
“A renewed focus on generating alpha on both sides of the portfolio has led us to increase single-name equity shorts by four-fold over the past year. Our total equity short exposure is nearly $4.5 billion today,” wrote Mr. Loeb in a letter to clients dated February 12.
Third Point generated an average return of 16.2% every year over the past 12 decades.
The hedge fund increased its stake in Allergan (NYSE:AGN) by more than 1.7 million shares to 5.4 million shares. Its stockholding in the company has a market value of approximately $1.69 billion in the fourth quarter.
Third Point also boosted its stake in Dow Chemical (NYSE:DOW) by more than 1.75 million shares to 25.25 million shares worth approximately $1.29 billion.
The hedge fund acquired 3 million shares of Morgan Stanley (NYSE:MS) with a market value of around $95.43 million and 1.5 million shares of Chubb Limited (NYSE:ACE) worth around $175.27 million.
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