Is Mondelez International Inc (MDLZ) a Good Stock To Buy?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Mondelez International Inc (NASDAQ:MDLZ).

Is Mondelez International Inc (NASDAQ:MDLZ) the right investment to pursue these days? Prominent investors seem to be in a pessimistic mood. The number of long hedge fund positions were cut by nine during the third quarter and 53 funds from the Insider Monkey database held shares at the end of September. At the end of this article we will also compare MDLZ to other stocks including Lowe’s Companies, Inc. (NYSE:LOW), U.S. Bancorp (NYSE:USB), and Danaher Corporation (NYSE:DHR) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Now, let’s analyze the key action regarding Mondelez International Inc (NASDAQ:MDLZ).

Hedge fund activity in Mondelez International Inc (NASDAQ:MDLZ)

At the end of September, 53 funds tracked by Insider Monkey were bullish on this stock, down by 15% from the end of the second quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Trian Partners, managed by Nelson Peltz, holds the largest position in Mondelez International Inc (NASDAQ:MDLZ). Trian Partners has a $2.11 billion holding, comprising 20.6% of its 13F portfolio. The second most bullish fund manager is Bill Ackman of Pershing Square, with a $1.01 billion stake; the fund has 18.6% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Boykin Curry’s Eagle Capital Management, Lei Zhang’s Hillhouse Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Because Mondelez International Inc (NASDAQ:MDLZ) has experienced a decline in interest from the smart money, logic holds that there lies a certain “tier” of hedgies that slashed their entire stakes by the end of the third quarter. It’s worth mentioning that Daniel S. Och’s OZ Management said goodbye to the biggest position of the “upper crust” of funds followed by Insider Monkey, totaling about $143.3 million in stock, and First Eagle Investment Management was right behind this move, as the fund said goodbye to about $62.4 million worth of shares. These bearish behaviors are important to note, as total hedge fund interest dropped by nine funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks similar to Mondelez International Inc (NASDAQ:MDLZ). We will take a look at Lowe’s Companies, Inc. (NYSE:LOW), U.S. Bancorp (NYSE:USB), Danaher Corporation (NYSE:DHR), and Costco Wholesale Corporation (NASDAQ:COST). All of these stocks’ market caps match MDLZ’s market cap.

As you can see these stocks had an average of 53 funds with bullish positions and the average amount invested in these stocks was $3.07 billion. That figure was $5.90 billion in Mondelez’s case. Lowe’s Companies, Inc. (NYSE:LOW) is the most popular stock in this table. On the other hand U.S. Bancorp (NYSE:USB) is the least popular one with only 41 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Lowe’s  Companies, Inc. (NYSE:LOW) might be a better candidate to consider a long position.