Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Mondelez International Inc (NASDAQ:MDLZ) in this article.
Mondelez International Inc (NASDAQ:MDLZ) has experienced an increase in support from the world’s most elite money managers in recent months. MDLZ was in 52 hedge funds’ portfolios at the end of the third quarter of 2019. There were 47 hedge funds in our database with MDLZ holdings at the end of the previous quarter. Our calculations also showed that MDLZ isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Nelson Peltz of Trian Partners
We’re going to take a glance at the latest hedge fund action surrounding Mondelez International Inc (NASDAQ:MDLZ).
Hedge fund activity in Mondelez International Inc (NASDAQ:MDLZ)
Heading into the fourth quarter of 2019, a total of 52 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards MDLZ over the last 17 quarters. So, let’s see 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 $1041.6 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $232.6 million position. Other investors bullish on the company included D E Shaw, Millennium Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Trian Partners allocated the biggest weight to Mondelez International Inc (NASDAQ:MDLZ), around 10.87% of its portfolio. Tremblant Capital is also relatively very bullish on the stock, dishing out 3.44 percent of its 13F equity portfolio to MDLZ.
As one would reasonably expect, key money managers have jumped into Mondelez International Inc (NASDAQ:MDLZ) headfirst. Hillhouse Capital Management, managed by Lei Zhang, assembled the largest position in Mondelez International Inc (NASDAQ:MDLZ). Hillhouse Capital Management had $140.9 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also initiated a $65.1 million position during the quarter. The other funds with new positions in the stock are Ricky Sandler’s Eminence Capital, Brett Barakett’s Tremblant Capital, and Brian Ashford-Russell and Tim Woolley’s Polar Capital.
Let’s check out hedge fund activity in other stocks similar to Mondelez International Inc (NASDAQ:MDLZ). We will take a look at General Electric Company (NYSE:GE), Altria Group Inc (NYSE:MO), CME Group Inc (NASDAQ:CME), and The Goldman Sachs Group, Inc. (NYSE:GS). This group of stocks’ market caps match MDLZ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GE | 51 | 4455114 | -5 |
| MO | 47 | 1364557 | 9 |
| CME | 46 | 2245287 | 7 |
| GS | 72 | 8237468 | 11 |
| Average | 54 | 4075607 | 5.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 54 hedge funds with bullish positions and the average amount invested in these stocks was $4076 million. That figure was $2813 million in MDLZ’s case. The Goldman Sachs Group, Inc. (NYSE:GS) is the most popular stock in this table. On the other hand CME Group Inc (NASDAQ:CME) is the least popular one with only 46 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately MDLZ wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); MDLZ investors were disappointed as the stock returned -6.4% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
