Both YUM Stock and McDonalds Stock pulled back today as the Chinese food inspection problem continues to plague both chains. Last week there were arrests at OSI group which supplies meat products for both suppliers. McDonalds has over 2000 restaurants in China and is the third largest market for McDonalds. However for YUM Brands, China is its number one market.
YUM Stock and China
A lot of investors do not understand that China is a third world country that continues to struggle with corruption, a complex bureaucracy and no real tracking system to monitor supply chains. I doubt this will change any time soon and it is becoming apparent that neither chain can gain complete control over the inspection process. This is bound to continue to create volatility within both companies stock which means more opportunity to profit from the volatility and uncertainty surrounding both McDonalds and YUM Stocks.
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