Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent our lives looking for two things: a business with a moat that widens on its own, and a balance sheet that lets you sleep through any storm. Yum! Brands gives us exactly half of each. Taco Bell is a genuinely wonderful franchise — nine consecutive quarters of outgrowing its industry is not luck. KFC outside the United States is a fine royalty machine. But the corporation wrapped around these brands is a deliberately leveraged financial vehicle: $12.3 billion of gross debt against negative $7.1 billion of book equity, $2.8 billion of that debt now reclassified as short-term because of springing maturities, and an unreserved IRS dispute that — with tax, penalties, and accrued interest — totals roughly $4.8 billion, better than a tenth of the market capitalization. Charlie's rule was simple: all we want to know is where we'll die, so we never go there.
Recent filings analysed: 8-K (2026-08-07), 10-Q (2026-08-05), 8-K (2026-07-30), 8-K (2026-06-16).
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