We recently published a list of 12 Best FMCG Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Mondelez International, Inc. (NASDAQ:MDLZ) stands against other best FMCG stocks to buy according to billionaires.
Historically, the consumer-packaged-goods (CPG) industry outperformed most of the other industries, mainly due to the high growth and consistent margins, says McKinsey. However, since 2012, numerous factors, such as inflation, market saturation, significant competition, fluctuating consumer tastes and behaviors, along with a fragmented consumer base resulted in growth challenges. Given increased interest rates and elevated industry multiples over the previous few years, there has been lesser deal activity, says the firm. Furthermore, a range of leading CPG companies continue to take a more measured approach, emphasizing midsize deals and aiming to achieve cost and growth synergies.
What Lies Ahead?
The broader downward trend of rates, along with strong, cash-rich balance sheets (and increased capability to take more affordable debt) of CPG companies can result in higher deal activity over the near future for the sector, says McKinsey. The firm expects a mix of 3 types of transactions, i.e., signature, sector-shaping deals, sizable horizontal deals allowing for greater subcategory consolidation, and targeted spin-offs of brands and business units possessing limited synergies or growth enablers with their current owner.
While the consumer sector remains broad, much of the analysis was focused on the F&B sector. McKinsey anticipates to see increased activity throughout CPG sectors, mainly in the personal care and beauty sectors. However, it also expects that the F&B sector might continue to capture a significant share of deals.
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Different Levers for Growth
Deloitte believes that, in 2025, the consumer products companies are likely to address the product portfolio and mix in a bid to entice the consumer and invest across the broad set of demand-generation capabilities. Furthermore, the businesses are projected to develop transformative efficiency so that savings can be produced, which can help finance such investments. Deloitte points out that increasing the unit volume sold remains an important lever that can support in driving profitable growth. Notably, some consumer products companies, mainly the profitable growers, remain focused on innovation to re-engage consumers. Deloitte also highlighted that high-performing companies seem to be adopting a clear-eyed view of their portfolios, and they continue to divest and acquire as needed.
Our Methodology
To list the 12 Best FMCG Stocks to Buy According to Billionaires, we used a screener and Insider Monkey’s exclusive database of billionaire stock holdings to shortlist the companies catering to the broader FMCG space. For the stocks with the same number of billionaire holdings, we have used the number of hedge fund investors as a secondary metric to rank the stocks, as of Q4 2024. We also mentioned the hedge fund sentiments around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A colourful array of products like candies, chocolates and gums on a supermarket shelf.
Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Billionaire Investors: 12
Number of Hedge Fund Holders: 55
Mondelez International, Inc. (NASDAQ:MDLZ) is engaged in manufacturing, marketing, and selling snack food and beverage products. Morgan Stanley initiated coverage on the company’s stock with an “Overweight” rating and a price objective of $69, demonstrating confidence in its strategic positioning and potential sales growth. The firm’s optimistic outlook revolves around Mondelez International, Inc. (NASDAQ:MDLZ)’s brand strength and pricing strategies, which can improve the market share. The company’s strategic emphasis on sustainable growth and value-enhancing acquisitions is a critical element of its approach.
Elsewhere, analyst Robert Moskow from TD Cowen maintained a “Buy” rating on the company’s stock with the price objective of $71.00. The analyst’s rating is backed by factors demonstrating a favourable outlook on its financial performance and market positioning. The analyst has highlighted Mondelez International, Inc. (NASDAQ:MDLZ)’s robust brand portfolio and its strategic presence in developing markets. Its strategic emphasis on the cake and pastry segment provides a strong growth opportunity.
This category expansion enables it to leverage existing distribution networks, brand recognition, and manufacturing expertise to enter a new market possessing healthy growth potential. Mondelez International, Inc. (NASDAQ:MDLZ)’s cakes and pastries business continues to grow and remains well-positioned to accelerate growth. The company’s established presence in the snack industry places it well to capitalize on the market trends.
Overall, MDLZ ranks 9th on our list of best FMCG stocks to buy according to billionaires. While we acknowledge the potential of MDLZ as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than MDLZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
