Here is What Hedge Funds Think About Mondelez International Inc (MDLZ)

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Mondelez International Inc (NASDAQ:MDLZ).

Is Mondelez International Inc (NASDAQ:MDLZ) ready to rally soon? The smart money was turning less bullish. The number of bullish hedge fund bets fell by 5 lately. Mondelez International Inc (NASDAQ:MDLZ) was in 45 hedge funds’ portfolios at the end of March. The all time high for this statistic is 69. Our calculations also showed that MDLZ isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Nelson Peltz of Trian Partners

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to take a peek at the fresh hedge fund action surrounding Mondelez International Inc (NASDAQ:MDLZ).

Do Hedge Funds Think MDLZ Is A Good Stock To Buy Now?

At first quarter’s end, a total of 45 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MDLZ over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Trian Partners, managed by Nelson Peltz, holds the most valuable position in Mondelez International Inc (NASDAQ:MDLZ). Trian Partners has a $549.2 million position in the stock, comprising 6.5% of its 13F portfolio. The second most bullish fund manager is Matthew Stadelman of Diamond Hill Capital, with a $531.3 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Noam Gottesman’s GLG Partners. In terms of the portfolio weights assigned to each position Trian Partners allocated the biggest weight to Mondelez International Inc (NASDAQ:MDLZ), around 6.49% of its 13F portfolio. Diamond Hill Capital is also relatively very bullish on the stock, earmarking 2.15 percent of its 13F equity portfolio to MDLZ.

Since Mondelez International Inc (NASDAQ:MDLZ) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there exists a select few fund managers who were dropping their entire stakes by the end of the first quarter. Intriguingly, Alexander Mitchell’s Scopus Asset Management cut the largest position of all the hedgies monitored by Insider Monkey, totaling an estimated $105.2 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund sold off about $41.7 million worth. These moves are important to note, as aggregate hedge fund interest fell by 5 funds by the end of the first quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Mondelez International Inc (NASDAQ:MDLZ) but similarly valued. These stocks are BP plc (NYSE:BP), Canadian National Railway Company (NYSE:CNI), Gilead Sciences, Inc. (NASDAQ:GILD), Automatic Data Processing, Inc. (NASDAQ:ADP), Fiserv, Inc. (NASDAQ:FISV), Infosys Limited (NYSE:INFY), and The TJX Companies, Inc. (NYSE:TJX). This group of stocks’ market values are closest to MDLZ’s market value.

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As you can see these stocks had an average of 48 hedge funds with bullish positions and the average amount invested in these stocks was $2667 million. That figure was $2845 million in MDLZ’s case. Fiserv, Inc. (NASDAQ:FISV) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 26 bullish hedge fund positions. Mondelez International Inc (NASDAQ:MDLZ) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MDLZ is 39. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on MDLZ, though not to the same extent, as the stock returned 6.2% since the end of Q1 (through June 18th) and outperformed the market.

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Disclosure: None. This article was originally published at Insider Monkey.