Hedge funds and other investment firms run by legendary investors like Israel Englander, Jeffrey Talpins and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Mondelez International Inc (NASDAQ:MDLZ) a good investment today? Investors who are in the know are taking an optimistic view. The number of long hedge fund positions increased by 2 recently. Our calculations also showed that mdlz isn’t among the 30 most popular stocks among hedge funds. MDLZ was in 47 hedge funds’ portfolios at the end of the first quarter of 2019. There were 45 hedge funds in our database with MDLZ positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to go over the key hedge fund action surrounding Mondelez International Inc (NASDAQ:MDLZ).
What have hedge funds been doing with Mondelez International Inc (NASDAQ:MDLZ)?
Heading into the second quarter of 2019, a total of 47 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. On the other hand, there were a total of 55 hedge funds with a bullish position in MDLZ a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Mondelez International Inc (NASDAQ:MDLZ) was held by Trian Partners, which reported holding $939.7 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $225.7 million position. Other investors bullish on the company included D E Shaw, GAMCO Investors, and Millennium Management.
Now, key hedge funds have been driving this bullishness. Arrowgrass Capital Partners, managed by Nick Niell, assembled the biggest position in Mondelez International Inc (NASDAQ:MDLZ). Arrowgrass Capital Partners had $7.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $5.4 million position during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, James Dondero’s Highland Capital Management, and Larry Foley and Paul Farrell’s Bronson Point Partners.
Let’s now review hedge fund activity in other stocks similar to Mondelez International Inc (NASDAQ:MDLZ). These stocks are The Goldman Sachs Group, Inc. (NYSE:GS), CVS Health Corporation (NYSE:CVS), Automatic Data Processing, Inc. (NASDAQ:ADP), and QUALCOMM, Incorporated (NASDAQ:QCOM). This group of stocks’ market values are similar to MDLZ’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GS | 76 | 7453407 | 6 |
| CVS | 61 | 908077 | -16 |
| ADP | 39 | 2852967 | -3 |
| QCOM | 45 | 1905850 | -6 |
| Average | 55.25 | 3280075 | -4.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 55.25 hedge funds with bullish positions and the average amount invested in these stocks was $3280 million. That figure was $2160 million in MDLZ’s case. The Goldman Sachs Group, Inc. (NYSE:GS) is the most popular stock in this table. On the other hand Automatic Data Processing, Inc. (NASDAQ:ADP) is the least popular one with only 39 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 calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on MDLZ as the stock returned 2.7% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
