Five Consumer Non-Durables Stocks That Hedge Funds Love

#2 Mondelez International Inc (NASDAQ:MDLZ)

– Hedge Funds with Long Positions (as of September 30): 69

– Aggregate Value of Hedge Funds’ Holdings (as of September 30): $6.88 billion

Confectionery giant Mondelez International, Inc (NASDAQ:MDLZ) emerged as one of the favorite stocks among activist hedge funds last year. Apart from Nelson Peltz‘s Trian Partners, activist investor Bill Ackman‘s Pershing Square also now holds a big position in Mondelez International Inc (NASDAQ:MDLZ) having acquired around 43 million shares during the third quarter. In its third quarter letter to its shareholders, Pershing Square revealed that Mondelez was its largest equity position at that time and it maintains its belief that “the opportunity for productivity improvement and margin expansion at Mondelez is vast – the largest in the large cap consumer packaged goods sector.”

Due to the involvement of such prominent investors, experts believe Mondelez International will be able to improve its profit margins at an even more rapid pace than it has done in the last six quarters. Moreover, there are also rumors that activist investors will push Mondelez International to do an M&A deal soon. Mondelez International’s stock currently trades at a price-to-earnings multiple of 7.99, which is significantly lower than the industry average of 22.66.

On January 7, analysts at Deutsche Bank downgraded the stock to ‘Hold’ from ‘Buy’ and lowered their price target to $48 from $49, which represents a potential upside of 18% from the stock’s current price. Although shares of Mondelez International remained almost flat during the third quarter, 20 more funds covered by us became bullish on the company and their holdings in the company increased by over $2 billion during the same period.