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Is Mondelez International Inc (MDLZ) Going to Burn These Hedge Funds?

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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Mondelez International Inc (NASDAQ:MDLZ), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Mondelez International Inc (NASDAQ:MDLZ) was in 53 hedge funds' portfolios at the end of June. The all time high for this statistic is 69. MDLZ shareholders have witnessed an increase in hedge fund sentiment in recent months. There were 45 hedge funds in our database with MDLZ holdings at the end of March. Our calculations also showed that MDLZ isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

According to most investors, hedge funds are perceived as worthless, outdated investment vehicles of yesteryear. While there are greater than 8000 funds in operation at present, Our researchers hone in on the bigwigs of this group, approximately 850 funds. These hedge fund managers handle most of the smart money's total capital, and by following their inimitable stock picks, Insider Monkey has brought to light various investment strategies that have historically beaten the market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .


Nelson Peltz of Trian Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 view the key hedge fund action encompassing Mondelez International Inc (NASDAQ:MDLZ).

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

Heading into the third quarter of 2021, a total of 53 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. By comparison, 54 hedge funds held shares or bullish call options in MDLZ a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Diamond Hill Capital held the most valuable stake in Mondelez International Inc (NASDAQ:MDLZ), which was worth $598.1 million at the end of the second quarter. On the second spot was Trian Partners which amassed $539.4 million worth of shares. Arrowstreet Capital, Two Sigma Advisors, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Trian Partners allocated the biggest weight to Mondelez International Inc (NASDAQ:MDLZ), around 6.31% of its 13F portfolio. Kehrs Ridge Capital is also relatively very bullish on the stock, setting aside 3.82 percent of its 13F equity portfolio to MDLZ.

Now, some big names have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, created the biggest position in Mondelez International Inc (NASDAQ:MDLZ). Holocene Advisors had $126.7 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also initiated a $76.4 million position during the quarter. The other funds with new positions in the stock are Brian Scudieri's Kehrs Ridge Capital, Ryan Caldwell's Chiron Investment Management, and Andrew Weiss's Weiss Asset Management.

Let's go over hedge fund activity in other stocks similar to Mondelez International Inc (NASDAQ:MDLZ). We will take a look at NIO Inc. (NYSE:NIO), Gilead Sciences, Inc. (NASDAQ:GILD), General Motors Company (NYSE:GM), U.S. Bancorp (NYSE:USB), Automatic Data Processing, Inc. (NASDAQ:ADP), Crown Castle International Corp. (REIT) (NYSE:CCI), and ConocoPhillips (NYSE:COP). This group of stocks' market valuations are closest to MDLZ's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NIO,34,2066911,6 GILD,54,1732734,-11 GM,86,7414862,0 USB,41,8305634,-2 ADP,41,3018791,-1 CCI,42,2093903,-1 COP,50,1158596,-1 Average,49.7,3684490,-1.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 49.7 hedge funds with bullish positions and the average amount invested in these stocks was $3684 million. That figure was $2947 million in MDLZ's case. General Motors Company (NYSE:GM) is the most popular stock in this table. On the other hand NIO Inc. (NYSE:NIO) is the least popular one with only 34 bullish hedge fund positions. Mondelez International Inc (NASDAQ:MDLZ) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MDLZ is 51.3. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 22.9% in 2021 through October 1st and beat the market again by 5.6 percentage points. Unfortunately MDLZ wasn't nearly as popular as these 5 stocks and hedge funds that were betting on MDLZ were disappointed as the stock returned -6.2% since the end of June (through 10/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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