Sometimes "not as bad" is good enough. That's what I have concluded from Yum! Brands (YUM) and McDonald's (MCD) earnings.
People remain convinced that McDonald's will do something huge when it shares details May 4 of its big plan to revamp. Yum!, meanwhile, has been and always will be about China and minus 12% is better than minus 15%. If the trajectory holds true, the stock could go much higher.
Both these stories are simply about the idea that they are way behind the market given the challenges surrounding the kind of food they serve, and the worries about safety and health, especially in China.
I think McDonald's, because of its amazing balance sheet and terrific yield, will keep catching a bid until it gets it right. Yum! will catch a bid as long as it doesn't miss numbers.
These are vampire stocks; they can't be killed, even if you think they should be because you wouldn't eat at them. Snobs are missing the point. There's more upside for both.
