UPDATE 1-Third Point takes stakes in Yum! Brands, Devon Energy
(Adds details on Third Point positions)
By Svea Herbst-Bayliss
BOSTON May 1 (Reuters) - Hedge fund Third Point told investors Friday it has taken new positions in Yum! Brands and Devon Energy and thinks U.S. stocks remain attractive because economic data should improve and a near-term rate hike seems unlikely.
Daniel Loeb's $17.5 billion hedge fund bought into fast-food restaurant company Yum! during the first quarter after determining it has "turned the page on recent trouble in its Chinese business," and that profit would recover dramatically over the next one to two years.
"We think investors should want to own Yum! for its unique open-ended middle-class growth story in China and its strong and growing franchise-led cash flows outside China," Third Point said in the letter to investors, which was seen by Reuters.
Yum!'s stock price gained 4 percent in morning trading to$89.40 per share.
Third Point did not disclose how much money it put to work in Yum!
Third Point gave Yum! management strong marks for having tackled two food-safety issues in China over the last three years and said it was focused on narrowing the performance gap between its KFC and Pizza Hut brands and competitors.
The New York-based fund also took a new stake in Devon Energy, saying it could perform better as management begins to focus its "capital in fewer, higher return areas." Continuación...